U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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GLOBAL-TECH CAPITAL CORP.
(Name of Small Business Issuer in Its Charter)
Nevada 1000
(State or Other Jurisdiction of (Primary Standard Industrial
Incorporation or Organization) Classification Code)
98-0191489
(I.R.S. Employer
Identification Number)
P. O. BOX 84037
BURNABY, B.C. V5A 4T9, CANADA (604) 889-1111
(Address, Including Zip Code, and Telephone Number, including Area Code, of
Registrant's Executive Offices)
MICHAEL MITSIADIS
C/O GLOBAL-TECH CAPITAL CORP.
P. O. BOX 84037
BURNABY, B.C. V5A 4T9, CANADA (604) 889-1111
(Name, Address, Including Zip Code, and Telephone Number, including Area Code,
of Agent for Service)
Copies of all correspondence to:
JOSEPH SIERCHIO, ESQ.
SIERCHIO & COMPANY, LLP
150 EAST 58TH STREET
NEW YORK, NEW YORK 10155
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APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC: As soon as practicable after this
registration statement becomes
effective.
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If this Form is filed to register additional securities for an offering pursuant
to Rule 426(b) under the Securities Act of 1933, check the following box and
list the Securities Act Registration Statement number of the earlier effective
Registration Statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act of 1933, check the following box and list the Securities Act
Registration Statement number of the earlier Registration Statement for the same
offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act of 1933, check the following box and list the Securities Act
Registration Statement number of the earlier Registration Statement for the same
offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
- ----------------------------------- ------------------------ ------------------------ --------------------------- ----------------
Title Of Each Class Of Securities Number of Shares To Be Proposed Maximum Proposed Maximum Amount of
To Be Registered Registered Offering Price Per Aggregate Offering Price Registration
Share Fee
- ----------------------------------- ------------------------ ------------------------ --------------------------- ----------------
- ----------------------------------- ------------------------ ------------------------ --------------------------- ----------------
Common Stock, $.001 par value 2,000,000 $0.05 (1) $100,000 $25.00
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(1) Calculated in accordance with Rule 457(o) under the Securities Act of 1933.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SECTION 8(a), MAY DETERMINE.
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GLOBAL-TECH CAPITAL CORP.
2,000,000 shares of Common Stock at a price of $.05 per share
This is our initial public offering. We are offering 2,000,000 shares
of our common stock at a price of $0.05 per share. We are offering the shares
directly, through our officers and directors on an all or none basis. This means
that we must sell all of the shares in order to close the offering.
The funds received from the subscribers will be held in escrow in a
non-interest bearing account. The offering will end on ________, 2001, a date
which is 120 days from the date of this prospectus unless terminated by us on an
earlier date as we may deem appropriate. The minimum number of shares that an
investor may purchase is 500,000. If all shares offered are not sold by _____,
2001, the offering will terminate and all funds received from subscribers will
be returned promptly. None of our officers and directors or affiliated persons
or related parties will be able purchase shares in this offering.
There is no trading market for our common stock. If a market were to
develop, it would most likely be on the NASD's OTCBB or the "Pink Sheets". It
would not be on any national securities exchange or the Nasdaq stock market.
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The purchase of shares involves substantial risk. See "Risk Factors" beginning
on page 6 for a discussion of risks to consider before purchasing our common
stock.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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Price to the Public(1) Maximum Commissions(1) Proceeds to the Company
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Per Share $0.05 -0- $0.05
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- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Total 2,000,000 Shares $100,000.00 -0- $100,000.00
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(1) We are offering the shares directly through our officers and directors on
an all or none basis. No compensation will be paid to our officers and
directors in connection with their efforts regarding the offer and sale of
our shares.
The date of this prospectus is________________, 2001.
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TABLE OF CONTENTS
Prospectus Summary...........................................................5
Risk Factors.................................................................6
Cautionary Note Regarding Forward-Looking Statements .......................12
Use of Proceeds.............................................................13
Arbitrary Determination of Offering Price...................................15
Dilution....................................................................15
Plan of Distribution .......................................................16
Legal Proceedings...........................................................17
Directors, Executive Officers, Promoters and Control Persons................17
Security Ownership of Certain Beneficial Owners and Management..............19
Description of Securities...................................................19
Market for Common Equity and Related Stockholder Matters....................20
Limitation of Liability and Indemnification matters ........................21
Legal Matters...............................................................22
Experts.....................................................................22
Interest of Named Experts and Counsel.......................................22
Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................................22
Business and Description of Property........................................24
Executive Compensation......................................................34
Where You Can Find Additional Information...................................35
Certain Relationships and Related Transactions..............................36
Changes in and Disagreements with Accountants on Accounting
And Financial Disclosure...............................................36
Index to Financial Statements...............................................37
Dealer Prospectus Delivery Obligation
Until ______, all dealers that effect transactions in these securities,
whether or not participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
4
PROSPECTUS SUMMARY
This summary contains material information about us and the offering
contained elsewhere in the prospectus. Sine it may not include all of the
information you may consider important, you should read the entire prospectus,
including the section titled "Risk Factors" and our financial statements and the
related notes, before deciding to purchase any shares.
Unless the context otherwise requires, references to "Global-Tech,"
"us," "we," and "our" refer to Global-Tech Capital Corp. and its wholly owned
subsidiaries.
Global-Tech Capital Corp.
Originally formed for the purpose of developing and marketing products
that could effectively improve night time visibility under various conditions,
we refocused our business activities in 2000 and we are now engaged in the
location, acquisition, exploration and, if warranted, development of a mineral
resource property in the Omineca Mining region of the Province of British
Columbia, Canada. We are an exploration stage company. We own only one property
at this time. Following the consummation of this offering, we intend to initiate
our exploration program in our property.
Our administrative office is located at 2365 Paulus Cresent, Burnaby,
B.C. V5A 2M2, Canada. Our telephone number at our corporate offices is (604)
889-1111.
The Offering
Common stock offered by us 2,000,000 shares at $.05 per share on an
all or none basis.
Common stock to be outstanding 12,151,400 shares
After this offering
Use of proceeds The proceeds from the sale of the shares
in this offering will be utilized to
pay the offering expenses, initiate our
exploration program and for general
working capital purposes. Since there is
a minimum amount to be raised, proceeds
from our sale of shares will be placed in
a non-interest bearing escrow account
until the earlier of (i) all 2,000,000
shares being sold; or (ii) the
termination of the offering.
Term of Offering 120 days (subject to our right to
terminate the offering sooner without
notice.)
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RISK FACTORS
Resource exploration and development is a speculative business,
characterized by a number of significant risks including, among other things,
unprofitable efforts resulting not only from the failure to discover mineral
deposits but from finding mineral deposits which, though present, are
insufficient in quantity and quality to return a profit from production. The
marketability of minerals acquired or discovered by us may be affected by
numerous factors which are beyond our control and which cannot be accurately
predicted, including, but not limited to, market fluctuations, the proximity and
capacity of milling facilities, mineral markets and processing equipment, and
such other factors as government regulations, including regulations relating to
royalties, allowable production, importing and exporting of minerals, and
environmental protection, the combination of which factors may result in our not
receiving an adequate return of investment capital.
Accordingly, you should carefully consider the following risk factors
before you make an investment decision regarding the purchase of our shares. We
have separated the risks into two broad categories: - risks related to our
business, property and industry; and - risks related to the offering and
ownership of our common stock.
Risks Related to Our Business, Property and Industry
Our long term profitability is uncertain as it is related to the success of our
exploration program of which there can be no assurance.
The claim to which we have a right to acquire an interest is in the
exploration stages only and is without a known body of commercial ore.
Development of the subject mineral property would follow only if favorable
exploration results are obtained. Mineral exploration and development involves a
high degree of risk and few properties which are explored are ultimately
developed into producing mines. There is no assurance that our mineral
exploration and development activities will result in any discoveries of
commercial bodies of ore. Our operation's long-term profitability will be in
part directly related to the cost and success of our exploration programs, which
may be affected by a number of factors.
We may not have the funds required and may not be able to obtain them in order
to complete our exploration activities.
Substantial expenditures are required to establish ore reserves through
drilling, to develop metallurgical processes to extract the metal from the ore
and, in the case of new properties, to develop the mining and processing
facilities and infrastructure at any site chosen for mining. Although
substantial benefits may be derived from the discovery of a major mineralized
deposit, no assurance can be given that minerals will be discovered in
sufficient quantities and grades to justify commercial operations or that the
funds required for development can be obtained on a timely basis. Our estimates
of reserves, mineral deposits
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and production costs can be affected by several factors, many of which are out
of our control. As such, we can make no assurances of mine life or the
profitability of our operations. Estimates of reserves, mineral deposits and
production costs can also be affected by such factors as environmental
permitting regulations and requirements, weather, environmental factors,
unforeseen technical difficulties, unusual or unexpected geological formations
and work interruptions. In addition, the grade of ore ultimately mined may
differ from that indicated by drilling results. Short term factors relating to
reserves, such as the need for orderly development of ore bodies or the
processing of new or different grades, may also have an adverse effect on mining
operations and on the results of operations. Material changes in ore reserves,
grades, stripping ratios or recovery rates may affect the economic viability of
any project. Reserves are reported as general indicators of mine life. Reserves
should not be interpreted as assurances of mine life or of the profitability of
current or future operations.
Weather interruptions in the province of British Columbia may affect and delay
our proposed exploration operations.
Our proposed exploration work can only be performed approximately five
to six months out of the year. This is because rain and snow cause roads leading
to our claims to be impassible during four months of the year. When roads are
impassible, we are unable to work and generate income. This may cause
significant delays in our operations which could have an adverse affect on our
business and results of operations.
Our operations are subject to the hazards and risks associated with exploration,
development and production of metals for which we have limited insurance
coverage.
Mineral exploration involves many risks, which even a combination of
experience, knowledge and careful evaluation may not be able to overcome.
Operations in which we have a direct or indirect interest will be subject to all
the hazards and risks normally incidental to exploration, development and
production of gold and other metals, including, but not limited to cave-ins,
harsh weather and terrain, unusual or expected formations, pollution and
equipment breakdown, all of which could result in work stoppages, damage to
property, and possible environmental damage. We have no insurance coverage and
do not presently intend to obtain any liability insurance.
We have a limited operating history.
We commenced our operations in 1998. As at June 30, 2001, we had
incurred cumulative losses from inception in the amount of $31,455.80. We have
not declared or paid dividends since then and do not anticipate doing so in the
foreseeable future. We are subject to risks inherent in the establishment of a
new business enterprise including limited capital resources, possible delays in
the exploration of our property, and possible cost overruns. If we are not able
to address these events, should they occur, we may have to curtail or suspend
our operations.
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Our short and long term liquidity and capital resources are uncertain which may
adversely affect our ability to continue our operations in the future.
Our sole property has not commenced commercial production and we have
no history of earnings or cash flow from our present operations. The only
present source of funds available to us is through the sale of equity or debt,
securities or other borrowings. Even if the results of exploration are
encouraging, we may not have sufficient funds to conduct the further exploration
that may be necessary to determine whether or not a commercially minable deposit
exists on any property and we may not realize a return on our investment. We may
generate additional working capital through equity offerings, borrowings,
operation, development, sale or possibly the joint venture development of our
property and/or a combination thereof. However, there is no assurance that any
such funds will be available for operations. Failure to obtain such additional
capital, if needed, would have a material adverse effect on our operations.
Our property contains no proven reserves.
The property in which we hold a right to acquire an interest is
considered to be in the exploration stage only and does not contain a known body
of commercial ore. See "Item 2. Description of Property". Failure to locate ore
reserves may adversely affect the economic viability of our project and our
operation.
There can be no assurance that our title for claims in which have an interest
will not be challenged by third parties.
While we have reviewed and are satisfied with the title for any claim
in which we have a material interest and, to the best of our knowledge, such
title is in good standing, there is no guarantee that title to such concessions
will not be challenged or impugned.
Our directors may face conflicts of interest in connection with our
participation in certain ventures because they are directors of other mineral
resource companies.
Messrs. Mallo and Turnbull, who serve as our directors, are also
directors of other mineral resource companies and, to the extent that such other
companies may participate in ventures in which we may participate, our directors
may have a conflict of interest in negotiating and concluding terms respecting
the extent of such participation. In the event that such a conflict of interest
arises at a meeting of our directors, a director who has such a conflict will
abstain from voting for or against the approval of such a participation or such
terms. In appropriate cases we will establish a special committee of independent
directors to review a matter in which several directors, or management, may have
a conflict. From time to time several companies may participate in the
acquisition, exploration and development of natural resource properties thereby
allowing for their participating in larger programs, permitting involvement in a
greater number of programs and reducing financial exposure in respect of any one
program. It may also occur that a particular company will assign all or a
portion of its interest in a particular program to another of these companies
due to the financial position of the company making the assignment. In
accordance with the laws of the Province
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of British Columbia, our directors are required to act honestly, in good faith
and in the best interest of the company. In determining whether we will
participate in a particular program and the interest therein to be acquired by
it, the directors will primarily consider the potential benefits to us, the
degree of risk to which we may be exposed and its financial position at that
time. Other than as indicated, we have no other procedures or mechanisms to deal
with conflicts of interest. We are not aware of the existence of any conflict of
interest as described above.
We have no sources of operating cash flow and we may be unable to meet our
additional funding requirements.
Our mineral claim is currently being assessed for exploration and as a
result, we have no source of operating cash flow. We have limited financial
resources and there is no assurance that if additional funding were needed, that
it would be available to us on terms and conditions acceptable to us. Failure to
obtain such additional financing could result in the delay or indefinite
postponement of further exploration and the possible, partial or total loss of
our interest in our property. We presently have sufficient financial resources
to undertake all of our currently planned exploration and development programs
which consist of Phase I of our exploration program. The undertaking of the
subsequent phases of our exploration program as well as the development of any
ore deposits found on our exploration property depends upon our ability to
obtain financing through debt financing, equity financing or other means. There
is no assurance that we will be successful in obtaining the required financing.
Failure to obtain additional financing on a timely basis could cause us to
forfeit our interest in our property and reduce or terminate our operations.
We face intense competition in our industry which may adversely affect our
ability to participate in certain agreements with other parties.
The mineral resources industry is intensely competitive and we compete
with many companies that have greater financial resources and technical
facilities than ourself. Significant competition exists for the limited number
of mineral acquisition opportunities available in the Omineca mining region of
British Columbia. As a result of this competition, our ability to acquire
additional attractive mining property interests on terms we consider acceptable
may be adversely affected.
We may, in the future, be unable to meet our share of costs incurred
under agreements to which we are a party and we may have our interests in the
properties subject to such agreements reduced as a result. Furthermore, if other
parties to such agreements do not meet their share of such costs, we may be
unable to finance the costs required to complete the recommended programs.
We will have to suspend our exploration plans if we do not have access to all of
the supplies and materials we need.
Competition and unforeseen limited sources of supplies in the industry
could result in occasional spot shortages of supplies such as dynamite, and
equipment such as bulldozers and
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excavators that we might need to conduct exploration. We have not attempted to
locate or negotiate with any suppliers of products, equipment or materials. We
will attempt to locate products, equipment and materials after this offering is
complete. If we cannot find the products and equipment we need, we will have to
suspend our exploration plans until we find the products and equipment we need.
Mineral prices are subject to fluctuation due to factors beyond our control.
The mining industry in general is intensely competitive and there is no
assurance that, even if commercial quantities of mineral resources are
developed, a profitable market will exist for the sale of same. Factors beyond
our control may affect the marketability of any minerals discovered. Although
the prices of copper have been relatively stable, no assurance may be given that
prices will remain so; significant price movements over short periods of time
may be affected by numerous factors beyond our control, including international
economic and political trends, expectations of inflation, currency exchange
fluctuations (specifically, the U.S. dollar relative to other currencies),
interest rates and global or regional consumption patterns, speculative
activities and increased production due to improved mining and production
methods. The effect of these factors on the price of minerals and therefore the
economic viability of any of our exploration projects cannot accurately be
predicted. As we are in the development stage, the above factors have had no
material impact on our operations or income.
Our operations are subject to environmental regulation.
All phases of our operations in British Columbia will be subject to
environmental regulations. Environmental legislation in British Columbia are
evolving in a manner which will require stricter standards and enforcement,
increased fines and penalties for non-compliance, more stringent environmental
assessments of proposed projects and a heightened degree of responsibility for
companies and their officers, directors and employees. Although presently
compliance with such laws is not a significant factor in our operations, there
is no assurance that future changes in environmental regulation, if any, will
not adversely affect our operations.
Subscribers to the offering will have little or no influence on matters
requiring shareholder approval because we are controlled by our Director and
entities affiliated with him who will be able to control all matters requiring
shareholder approval.
Michael Mitsiadis, our President and a director, owns 40% of our issued
and outstanding shares of common stock. Mr. Mitsiadis will be able to
significantly influence all matters requiring approval by our shareholders,
including the election of directors and the approval of mergers or other
business combinations transactions. Even if we sell all 2,000,000 shares of
common stock in this offering, Mr. Mitsiadis will still be able to control us.
10
Our future performance is dependent on our ability to retain key personnel, the
loss of which would adversely affect our success and growth.
Our performance is substantially dependent on the performance of our
senior management and sales personnel. In particular, our success depends on the
continued efforts of our President and director, Michael Mitsiadis and our
director, David Mallo. Both Messrs. Mitsiadis and Mallo have over twenty years
of experience. The loss of the services of either of them could have a material
adverse effect on our business, results of operations and financial condition as
commission revenues would most likely dramatically decline. We do not have
employment agreements in place with our senior management or key employees.
Our management is inexperienced in managing a public company.
Although certain members of our current management have had experience
managing a public company or a large operating company, there can be no
assurance that we will be able to effectively manage the expansion of our
operations, that our systems, procedures or controls will be adequate to support
our operations or that our management will be able to achieve the rapid
execution necessary to fully exploit the market opportunity for our products and
services. Any inability to manage growth effectively could have a material
adverse effect on our future success.
Risks Related to the Offering and Ownership of our Common Stock
The value and transferability of our shares may be adversely impacted by the
limited trading market for our shares and the penny stock rules.
There is no current trading market for our shares and there can be no
assurance that a trading market will develop, or, if a trading market does
develop, that it will be sustained. To the extent that a market develops for our
shares at all, they will likely appear in what is customarily known at the "pink
sheets" or on the NASD Bulletin Board, which may limit their marketability and
liquidity.
To date, neither we nor anyone acting on our behalf has taken any
affirmative steps to request or encourage any broker/dealer to act as a market
maker for our shares. Further, we have not had any discussions with any market
maker regarding the participation of any market maker in the future trading
market, if any, for our shares. In addition, holders of our common stock may
experience substantial difficulty in selling their securities including as a
result of the "penny stock rules," which restrict the ability of brokers to sell
certain securities of companies whose assets or revenues fall below the
thresholds established by those rules.
Future sales of shares by us may reduce the value of our stock.
The total amount of shares covered by this prospectus would represent
approximately 20% of the number of our outstanding shares on the date of this
prospectus. If required, we will seek to raise additional capital through the
sale of our common stock. Future sales of shares by us could cause the market
price of our common stock to decline.
11
We have a large number of restricted shares outstanding, a portion of which may
be sold under Rule 144 following completion of our offering, which may reduce
the price of our shares should a trading market develop.
Of the 12,151,400 shares of our common stock to be outstanding upon
completion of this offering, 4,508,500 shall be "restricted securities,"
4,000,000 of which are owned by a corporation controlled by Michael Mitsiadis,
our President and Director. Mr. Mitsiadis is an affiliate of ours, as that term
is defined in Rule 144 under the Securities Act. Absent registration under the
Securities Act, the sale of such shares is subject to Rule 144, as promulgated
under the Securities Act. 4,000,000 of the "restricted securities" will be
eligible for resale under Rule 144. In general, under Rule 144, subject to the
satisfaction of certain other conditions, a person, including one of our
affiliates, who has beneficially owned restricted shares of our common stock for
at least one year is permitted to sell in a brokerage transaction, within any
three-month period, a number of shares that does not exceed the greater of 1% of
the total number of outstanding shares of the same class, or, if our common
stock is quoted on a stock exchange, the average weekly trading volume during
the four calendar weeks preceding the sale, if greater. Rule 144 also permits a
person who presently is not and who has not been an affiliate of ours for at
least three months immediately preceding the sale and who has beneficially owned
the shares of common stock for at least two years to sell such shares without
regard to any of the volume limitations described above.
No prediction can be made as to the effect, if any, that sales of
shares of common stock or the availability of such shares for sale will have on
the market prices of our common stock prevailing from time to time. The
possibility that substantial amounts of our common stock may be sold under Rule
144 into the public market may adversely affect prevailing market prices for the
common stock and could impair our ability to raise capital in the future through
the sale of equity securities.
The offering price of our shares was arbitrarily determined by us and thus, is
not an indication of the stock's valuation.
Prior to this offering, there has been no public trading market for our
shares. The initial public offering price of our shares has been arbitrary
determined by us and does not bear any relationship to established valuation
criteria such as assets, book value or prospective earnings. Among the factors
considered by us were the proceeds to be raised by the offering, the lack of
trading market, the amount of capital to be contributed by the public in
proportion to the amount of stock to be retained by present stockholders and our
relative requirements.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains statements that plan for or anticipate the
future, called "forward-looking statements." In some cases, you can identify
forward-looking statements by terminology such as "may," "will," "should,"
"could," "expects," "plans," "intends," "anticipates," "believes," "estimates,"
"predicts," "potential" or "continue" or the negative of those terms and other
comparable terminology.
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These forward-looking statements include statements about:
o our market opportunity;
o our strategies;
o competition;
o Expected activities and expenditures as we pursue our business plan;
and
o the adequacy of our available cash resources.
These statements appear in a number of places in this prospectus and
include statements regarding our intent, belief or current expectations, those
of our directors or officers with respect to, among other things: (i) trends
affecting our financial condition or results of operations, (ii) our business
and growth strategies, and (iii) our financing plans. Although we believe that
the expectations reflected in the forward-looking statement are reasonable, we
cannot guarantee future results, levels of activity, performance or
achievements.
The Private Securities Litigation Reform Act of 1995, which provides a
"safe harbor" for similar statements by existing public companies, does not
apply to our offering.
The accompanying information contained in this prospectus, including
the information discussed under the headings "Risk Factors," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business" identify important factors that could adversely affect actual results
and performance. All forward-looking statements attributable to us are expressly
qualified in their entirety by the cautionary statement appearing above.
USE OF PROCEEDS
The shares are being offered directly by us on an all or none basis.
This means that we must sell all 2,000,000 shares before we can close the
offering.
The shares will be sold on a first come-first serve basis. Unless all
2,000,000 shares are sold by _____, 2001 (which is 120 days of the date of this
Prospectus), the offering will terminate and all funds received from subscribers
by the date on which the offering is terminated will be promptly returned. The
proceeds of the offering will be held in a non-interest bearing escrow account
until the earlier of the date on which (i) all 2,000,000 shares are sold, or
(ii) the offering is terminated. Therefore, in the event that all 2,000,000
shares are not sold, prospective investors' funds may be held in escrow for as
long as 120 days before they are returned by the escrow agent.
If all 2,000,000 shares offered are sold, the gross proceeds of this
offering will be $100,000 and the net proceeds will be $51,000. We expect
expenses of the offering, including, but not limited to, accounting fees and
legal fees, to be approximately $49,000.
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The first $ 49,000 raised will be used to pay offering expenses. The
net proceeds will be utilized as follows:
Amount raised: $ 100,000
Allocation
Offering expenses $ 49,000
Payment of Consulting Fees $ 2,000
Exploration $ 33,000
Working capital $ 16,000
The amount of money allocated for exploration is only an estimate. That
is because we do not know how much will ultimately be needed for exploration.
Indeed, our property was the subject of a geological report which recommends
that we carry out a four phase program of exploration. (See "Description of
Property.") At the close of this offering, subject to permissible weather
conditions, we plan to implement Phase I of the exploration program at a cost of
approximately CAN $50,000 (approximately US$33,000). Phase II, contingent upon
successful results from Phase I is estimated to cost CAN $150,000 (approximately
US$100,000). Phase III, contingent upon successful results from Phase II is
estimated to cost CAN $300,000 (approximately US$200,000). Phase IV, contingent
upon successful results from Phase III is estimated to cost CAN $500,000
(approximately US$333,333).
Although we have sufficient cash on hand to satisfy our operation
expenses over the next twelve months, we do not have sufficient capital to
implement Phase I of our exploration program. We must sell all of the shares
offered in order to do so.
If successful results are obtained from Phase I, we will implement
Phase II of the program subject to our ability to secure additional financing to
cover the costs of that Phase. Likewise, if successful results are obtained from
the remaining phases, we currently intend to implement the latter phases. If we
are successful in implementing the entire exploration program, we may sell or
develop the property either alone or in conjunction with others.
While we currently intend to use the proceeds of this offering
substantially in the manner listed above, we reserve the right to reassess and
reassign the use if, successful results are not obtained from any phase of the
exploration program, or if for any reason in the judgment of our board of
directors, changes are necessary or advisable. At present, no material changes
are contemplated. Should there be any material changes in the above projected
use of proceeds in connection with this offering, we will issue an amended
prospectus reflecting the same.
It may be necessary for us to incur some administrative costs for
preparation and filings of periodic reports with the Securities and Exchange
Commission, the amount of which is not expected to be more than $10,000 through
June 30, 2002. It is expected that these costs would be paid from existing
working capital. We expect to keep any proceeds not utilized for these purposes
in a working capital reserve.
14
In the event that we are unable to sell all of the shares offered in
this offering and it is terminated, we will attempt to extend the deadlines
under the French Claim Property Option Agreement and will seek other sources of
financing.
Except as described in this prospectus, no portion of the proceeds of
the offering will be paid to officers, directors and/or their affiliates or
associates.
ARBITRARY DETERMINATION OF OFFERING PRICE
There is no trading market for our shares. The initial offering price
of $0.05 per share has been arbitrarily determined by us, and bears no
relationship whatsoever to our assets, earnings, book value or any other
objective standard of value. Among the factors considered by us in determining
the initial offering price were:
* The lack of trading market
* The proceeds to be raised by the offering
* The amount of capital to be contributed by the public in proportion to
the amount of stock to be retained by present stockholders
We have not declared, and do not foresee declaring, any dividends now
or into the foreseeable future.
DILUTION
The difference between the public offering price per share and the pro
forma net tangible book value per share of our Common Stock after this offering
constitutes the dilution to investors in this offering. Net tangible book value
per share is determined by dividing our net tangible book value (total tangible
assets less total liabilities) by the number of outstanding shares of Common
Stock. Dilution arises mainly from the arbitrary decision by a company as to the
offering price per share. Dilution of the value of the shares purchased by the
public in this offering will also be due, in part, to the lower book value of
the shares presently outstanding, and in part, to expenses incurred in
connection with the public offering.
Net tangible book value is the net tangible assets of a company (total
assets less total liabilities and intangible assets; please refer to "Financial
Statements"). At June 30, 2001, we had a net tangible book value of $31,735.90
or $.003 per share.
The following table illustrates the dilution on a per share basis based
upon the book value as at June 30, 2001 and the receipt by us of the proceeds
from the sale of the 2,000,000 shares:
Initial public offering price $ .05
Pro forma net tangible book value at June 30, 2001 .00
Increase in pro forma net tangible book value attributed to new investors .01
Adjusted pro forma net tangible book value after offering .01
Dilution to new investors .04
15
After giving effect to the sale of the 2,000,000 shares being offered
at an initial public offering price of $0.05 per share and after deducting
estimated expenses of this offering ($49,000), our adjusted net tangible book
value at June 30, 2001 after the offering would have been $82,736 or $0.01 per
share, representing an immediate increase in net tangible book value of $0.01
per share to the existing shareholders and an immediate dilution of $0.04 or 80%
per share to new investors.
The following table sets forth, on a pro forma basis as of June 30,
2001, with respect to our existing stockholders and new investors, a comparison
of the number of shares of common stock we issued, percentage ownership of those
shares, the total consideration paid, the percentage of consideration paid and
the average per share.
Shares Purchased Total Consideration
------------------------- --------------------------
Average Average
Number Percentage Amount Percentage Price per Share
------ ---------- ------ ---------- ---------------
Existing shareholders 10,151,400 84.0% $88,500 47.0% $ .01
New investors 2,000,000 16.0% 100,000 53.0% $ .05
---------- ----- ------- ------
Total 12,151,400 100.0% $188,500 100.0%
========== ====== ======== ======
PLAN OF DISTRIBUTION
We offer the right to subscribe for 2,000,000 shares at $.05 per share.
The minimum number of shares you can purchase is 50,000. We propose to offer the
shares directly on an all or none basis. Therefore, all 2,000,000 shares must be
sold before the offering can be completed. The offering will be for a period of
120 days from the date of this prospectus unless terminated by us sooner.
The proceeds of the offering will be held in a non-interest bearing
escrow account until all 2,000,000 shares are sold or the offering is
terminated. Therefore, subscribers' funds may be held in escrow for up to 120
days before they are returned by the escrow agent. No funds will be returned to
the subscribers once all shares offered have been sold and the subscriptions
have been accepted by us.
No compensation is to be paid to any person for the offer and sale of
the shares. We will sell the shares in this offering through our president and
directors, Michael Mitsiadis, David Mallo and Douglas Turnbull, who will
distribute prospectuses related to this offering. We estimate that approximately
100 Prospectuses will be distributed by them. They intend to distribute
Prospectuses to acquaintances, friends and business associates.
Although each of our directors and officers is an associated person of
our company as that term is defined in Rule 3a4-1 under the Exchange Act, they
will deemed not to be a broker for the following reasons:
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* They are not subject to a statutory disqualification as that term is
defined in Section 3(a)(39) of the Exchange Act at the time of their
participation in the sale of our securities.
* They will not be compensated for their participation in the sale of our
securities by the payment of commission or other remuneration based
either directly or indirectly on transactions in securities.
* They are not associated persons of a broker or dealers at the time of
their participation in the sale of our securities.
* They meet all of the following conditions:
* The associated persons primarily perform, or are intended
primarily to perform at the end of the offering, substantial
duties for or on our behalf otherwise than in connection with
transactions in securities; and
* The associated person was not a broker or dealer, or an
associated person of a broker or dealer, within the preceding
12 months; and
* The associated person does not participate in selling an
offering of securities for any other issuer more than once
every 12 months other than in reliance on paragraphs (a)(4)(i)
or (a)(4)(iii) of Rule 3a4-1 under the Exchange Act.
As of the date of this prospectus, no broker has been retained by us
for the sale of shares being offered. In the event a broker who may be deemed an
underwriter is retained by us, an amendment to our registration statement will
be filed.
Method of Subscribing
You may subscribe by filling in and signing the subscription agreement
and delivering it, prior to the expiration date, to us. The subscription price
of $.05 per share must be paid in cash or by check, bank draft or postal express
money order payable in United States dollars to the order of Sierchio & Company,
LLP, as Escrow Agent. and delivered to us. We reserve the right to reject any
subscription in whole or in part in our sole discretion for any reason
whatsoever notwithstanding the tender of payment at any time prior to our
acceptance of the subscriptions received.
Expiration Date
This offering will expire on __________________, 2001, 120 days from
the date of this prospectus, unless concluded by us on an earlier date as we may
deem appropriate.
LEGAL PROCEEDINGS
Neither we nor our property is a party to any pending legal proceeding.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our director(s), executive officer(s) and other key employees, and
their ages, as of September 5, 2001 are as follows:
17
Name Age Positions held with the Company Since
- ---- --- ------------------------------- -----
Michael Mitsiadis 44 President and Director January 24, 2000
David Mallo 42 Secretary August 1, 2001
Douglas Turnbull 38 Director August 1, 2001
The backgrounds and business experience of our directors, executive
officers and significant employees during the past five years are as follows:
Michael Mitsiadis has, since 1997, been a private financial consultant
involved in mergers and acquisitions and venture capital transactions. Since
January 24, 2000, Mr. Mitsiadis has served as our President and director. Prior
to 1997, Mr. Mitsiadis worked as a commercial and residential realtor.
David Mallo has served as Secretary and a director of our Company
since August 1, 2001. From 1993 through 2000, Mr. Mallo was Vice President of
Exploration for Adrian Resources Ltd, a British Columbia corporation. Mr. Mallo
also serves as a director of Hyperion Resources Corp. and Lund Venture Ltd. Both
Hyperion Resources Corp. and Lund Venture Ltd. trade on the Canadian Venture
Exchange under the symbols HYP and LUV, respectively.
Douglas Turnbull has served as a director of our Company since August
1, 2001. He is also President of Lakehead Geological Services, Inc. a British
Columbia corporation. Mr. Turnbull also serves as a director of Fresco
Developments Ltd. and Buffalo Diamonds Ltd. Both Fresco Developments Ltd. and
Buffalo Diamonds Ltd. trade on the Canadian Venture Exchange under the symbols
FDP and YBU, respectively.
There are no family relationships among our directors, executive
officers or persons nominated or chosen by us to become directors or executive
officers.
During the past five years, none of our directors, executive officers,
promoters or control persons have been:
(a) the subject of any bankruptcy petition filed by or against any
business of which such person was a general partner or
executive officer either at the time of the bankruptcy or
within two years prior to that time;
(b) convicted in a criminal proceeding or is subject to a pending
criminal proceeding (excluding traffic violations and other
minor offenses);
(c) subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type
of business, securities or banking activities; or
(d) found by a court of competent jurisdiction (in a civil
action), the Commission or
18
the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following lists as of September 5, 2001 the beneficial ownership of
common stock of each person known to us who owns more than 5% of our issued and
outstanding common stock and of our directors and executive officers.
Name and address* of Amount and Nature Percent of
Beneficial Owner of Beneficial Ownership Class
- ------------------------- ----------------------- -----
Michael Mitsiadis 4,018,500 (2)(3) 39.6%
David Mallo Nil Nil
Douglas Turnbull Nil Nil
All directors, executive officers
and significant employees as a
group (3 persons) 4,018,500 39.6%
* Unless otherwise referenced, the address for each of the above
mentioned parties is c/o Global-Tech Capital Corp., P. O. Box
84037, Burnaby, B.C. V5A 4T9, Canada.
(1) Direct Ownership.
(2) Beneficial Ownership.
(3) Includes 4,000,000 shares registered in the name of Westar Capital Corp., a
British Columbia corporation controlled by Mr. Mitsiadis; Includes 9,000
shares registered in the name of Greg Mitsiadis, Mr. Mitsiadis' son;
Includes 9,000 shares registered in the name of Chris Mitsiadis, Mr.
Mitsiadis' son; Includes 500 shares registered in the name of Nicholas
Mitsiadis, Mr. Mitsiadis' son; Does not include 490,000 shares registered
in the name of Nancy Mitsiadis, Mr. Mitsiadis' mother, as to which Mr.
Mitsiadis disclaims any direct or beneficial interest; Does not include
9,000 shares registered in the name of Kimon Mitsiadis, Mr. Mitsiadis'
father, as to which Mr. Mitsiadis disclaims any direct or beneficial
interest; Does not include 475,000 shares registered in the name of Genie
Kouris, Mr. Mitsiadis' sister, as to which Mr. Mitsiadis disclaims direct
or beneficial interest.
DESCRIPTION OF SECURITIES
Common Stock
We are authorized to issue 200,000,000 shares of common stock, $0.001
par value per share, of which 10,151,400 shares were issued and outstanding as
of the date of this prospectus. Each outstanding share of common stock entitles
the holder to one vote, either in person or by proxy, on all matters that may be
voted upon by the owners of those shares at
19
meetings of the stockholders.
The holders of common stock (i) have equal rights to dividends from
funds legally available for the payment of dividends, when, as and if declared
by our board of directors; (ii) do not have preemptive, subscription or
conversion rights, and (iii) are entitled to one non-cumulative vote per share
on all matters on which stockholders may vote at all meetings of stockholders.
All shares of common stock which are the subject of this offering, when
issued, will be fully paid for and non-assessable, with no personal liability
attaching to their ownership. Each shareholder of common stock is entitled to
one vote per share with respect to all matters that are required by law to be
submitted to shareholders. The holders of shares of our common stock do not have
cumulative voting rights, which means that the holders of more than 50% of the
outstanding shares, voting for the election of directors, can elect all of our
directors if they so choose and, in that event, the holders of the remaining
shares will not be able to elect any of our directors.
Each share of common stock is entitled to share pro rata in dividends
and distributions with respect to the common stock when, as and if declared by
the board of directors from funds legally available for that purpose. No holder
of any shares of common stock has any pre-emptive right to subscribe for any of
our securities. All shares of common stock outstanding are fully paid and
nonassessable.
Dividends
We have not declared any dividends since inception, and have no present
intention of paying any cash dividends on our common stock in the foreseeable
future. The payment of dividends, if any, in the future, rests within the
discretion of our board of directors and will depend, among other things, upon
our earnings, our capital requirements and our financial condition, as well as
other relevant facts.
Transfer Agent and Registrar
Currently, the transfer agent and registrar for our common stock is the
Nevada Agency & Trust Company, Suite 880, 50 West Liberty Street, Reno, Nevada,
89501.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
There has been no trading market for our common stock. There can be no
assurance that a trading market will develop. To date, neither we nor anyone
acting on our behalf has taken any affirmative steps to retain or encourage any
broker/dealer to act as a market maker for our common stock. Further, there have
been no discussions or understandings, preliminary or otherwise, between us or
anyone acting on our behalf and any market maker regarding the participation of
any market maker in the future trading market, if any, for our common stock.
There are currently 37 holders of our outstanding common stock. The
outstanding
20
common stock was sold pursuant to Rule 504 of Regulation D and the
terms of Regulation S.
There are no outstanding options or warrants to purchase, or securities
convertible into, our common equity.
As of the date of this prospectus, of the 10,151,400 shares of our
common stock issued and outstanding, 6,085,400 of our shares of common stock are
immediately eligible for sale in the public market without restriction or
further registration under the Securities Act of 1933, unless purchased by or
issued to any "affiliate" of ours, as that term is defined in Rule 144
promulgated under the Securities Act of 1933, described below. All other
outstanding shares of our common stock are "restricted securities" as that term
is defined under Rule 144, in that those shares were issued in private
transactions not involving a public offering and may not be sold in the absence
of registration other than in accordance with Rule 144, 144(k) or 701
promulgated under the Securities Act of 1933 or another exemption from
registration.
Sales of substantial amounts of our common stock under Rule 144, this
prospectus or otherwise could adversely affect the prevailing market price of
our common stock and could impair our ability to raise capital through the
future sale of our securities.
No dividends have been paid on our common stock since our inception.
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
We believe that provisions of our Articles of Incorporation and bylaws
will be useful to attract and retain qualified persons as directors and
officers. Our Articles of Incorporation eliminates any personal liability of
directors or officers to the Company or our stockholders for damages for breach
of fiduciary duties as directors or officers except for acts or omissions which
involve intentional misconduct, fraud or a knowing violation of law or the
payment of dividends in violation of Nevada statutes. Our bylaws provide for the
indemnification by us to the fullest extent permitted by the Nevada Corporation
Law for officers and directors.
Insofar as indemnification for liabilities arising under the Securities
Act of 1993 may be permitted to our directors and officers under the provisions
mentioned above, or otherwise, we have been advised that in the opinion of the
Securities and Exchange Commission that indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against those liabilities
(other than our payment of expenses incurred or paid by a director or officer in
the successful defense of any action, suit or proceeding) is asserted by a
director or officer in connection with the securities being registered, we will,
unless in the opinion of our counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
the indemnification by us is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of that
issue.
21
LEGAL MATTERS
The validity of the issuance of the common stock offered hereby has
been passed upon for us by Sierchio & Company, LLP, New York, New York.
EXPERTS
The financial statements of Global-Tech Corp. at June 30, 2001 and June
30, 2000 appearing in this prospectus and in the registration statement have
been audited by Richard M. Prinzi, CPA, as described in his report regarding the
financial statements appearing elsewhere in this registration statement, and are
included in reliance upon that report given upon the authority of that firm as
experts in auditing and accounting.
INTEREST OF NAMED EXPERTS AND COUNSEL
Our experts and counsel were not hired on a contingent basis, will not
receive an interest in our company, nor were they a director, promoter, officer
or employee of our company.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of our plan of operation, financial condition
and results of operations should be read in conjunction with the Consolidated
Financial Statements and Notes to those financial statements included elsewhere
in this prospectus. This discussion contains forward-looking statements that
involve risks and uncertainties. Our actual results may differ materially from
those anticipated in these forward-looking statements as a result of various
factors, including but not limited to, those discussed under "Risk Factors" and
elsewhere in this prospectus.
PLAN OF OPERATION
The property in which we hold a right to acquire an interest is
considered in the exploration stage only. Therefore, we have not had revenues
from operations since our inception and have no regular cash flow. We are, thus,
dependent on generating income from mining operations or raising funds through
the issuance of our shares in order to undertake further exploration and
development of our property, finance further acquisitions and meet general and
administrative expenses in the long-term. There can be no assurance that we will
be successful in raising the required financings.
Our property was the subject of a geological report which recommends
that we carry out a four phase program of exploration. (See "Description of
Property"). Phase I would consist of geological mapping of the entire property
as well as prospecting and soil sampling, at an estimated cost of CAN $50,000
(approximately US$33,000). We plan to carry out Phase I of the exploration
program which will take less than 12 months. In the event that Phase I is
22
successful, we will carry out the next phase of the exploration program subject
to our ability to secure additional financing to cover the costs of Phase II.
We expect our current cash reserves to satisfy our cash requirements
for the next eighteen months exclusive of any cash requirements associated with
the implementation of our exploration program. Accordingly, we will not need to
raise additional funds in the next twelve months unless we were to implement
Phase II of our exploration program, in which case we would have to secure
additional financing.
We do not expect to purchase or sell any plants and/or significant
equipment. We do not expect any significant changes in our number of employees.
RESULTS OF OPERATIONS
For the years ended June 30, 2000 and 2001
For the year ended June 30, 2001, we had a net loss of $31,455.80
compared to a net loss of $21,305.70 for the year ended June 30, 2000, an
increased loss of $10,150.10 or 48%. The loss per share of $.002 for the year
ending June 30, 2000 increased to $.003 per share for the year ended June 30,
2001. As we have not had any revenues from operations since our inception, the
increased loss for the year ended June 30, 2001 was comprised of the $17,289.38
realized loss on investments compared to $0 for the year ended June 30, 2000, as
well as expenses totaling $14,176.33 for the year ended June 30, 2001 as
compared to $21,305.70 for the year ended June 30, 2000.
The major components of our expenses were office, legal and
professional, bank charges as well as taxes and state fees. Although the office
expenses increased by $275.24 from $25.50 for the year ended June 30, 2000 to
$300.74 for the year ended June 30, 2001 and taxes and state fees increased by
$1,085.89 from $210 for the year ended June 30, 2000 to $1,295.89 for the year
ended June 30, 2001, the legal and professional expenses decreased by $8,500
from $21,000 for the year ended June 30, 2000 to $12,500 for the year ended June
30, 2001. This decrease of 41% in legal and professional expenses can be
attributed to the fact that the expenses associated with the refocus of our
business efforts and our initial capitalization were incurred in the year ended
June 30, 2000.
LIQUIDITY AND CAPITAL RESOURCES
To date, virtually all funding for our acquisition of and expenditures
on our resource property and ongoing operations has come from the issuance of
our common stock.
We are in the exploration stage on our mineral property and therefore
have no regular cash flow. We are, therefore, dependent on generating income
from mining operations or raising funds by the issuance of shares in order to
finance further acquisitions, undertake our exploration program and the
development of our mineral property, and meet general and administrative
expenses in the long-term. There can be no assurance that we will be successful
in raising the required financing.
23
Since we are solely involved in the exploration and evaluation of our
one mineral property, it is the opinion of management that the most meaningful
financial information relates primarily to current liquidity and solvency. As at
June 30, 2001 we had working capital of $31,735.90. We had no bank loans at June
30, 2001. Our future financial success will be dependent on the extent to which
we can discover mineralization and establish the economic viability of
developing our property. Such development may take years to complete and future
cash flows, if any, are difficult to determine with any certainty. The
realization value of any mineralization discovered by us is largely dependent on
factors beyond our control such as the market value of the metals produced,
mining regulations in Canada and foreign exchange rates.
We presently have no producing properties, and our material property
contains no known mineral reserves; the limited activities on such property to
date have been exploratory in nature. Except as disclosed herein, we do not
possess reliable information concerning the history of previous operations
including the names of previous operators, if any, on our property.
We expect that our existing capital requirements arising from the
evaluation of our existing mineral property and the further fulfillment of our
exploration program will be met from the proceeds raised in this offering as
well as future equity financings.
BUSINESS AND DESCRIPTION OF PROPERTY
Overview
We were incorporated under the laws of Nevada on July 21, 1998 for the
purposes of developing and marketing products designed to improve visibility at
night under various circumstances. Not being able to implement our business
plan, we refocused our business activities in 2000 and are engaged in the
location, acquisition, exploration and, if warranted, development of mineral
resource properties in and around the Omineca mining region of British Columbia,
Canada. The mineral property in which we have a right to acquire an interest is
currently in the exploration stage. Our primary objective is to explore the
French claim Property and, if warranted, to develop that mineral property. Our
secondary objective is to locate, evaluate and acquire other mineral properties,
primarily in the British Columbia region and, to finance their exploration and
development either through equity financing, by way of joint venture or option
agreements or through a combination of both.
Although we are actively reviewing the acquisition of additional
claims, our primary focus is the initiation of the exploration programs on the
French Claim Property and, if warranted, its subsequent development. See
"Description of Property".
Competitive Factors
The copper mining industry is fragmented. We compete with other
exploration companies looking for copper. We are one of the smallest exploration
companies in existence.
24
We are an infinitely small participant in the copper mining market. While we
compete with other exploration companies, there is no competition for the
exploration or removal or mineral from our property. Readily available markets
exist in Canada and around the world for the sale of copper. Therefore, we will
be able to sell any copper that we are able to recover.
Environmental Regulation
All phases of our operations in Canada are subject to environmental
regulations. Environmental legislation in Canada is evolving in a manner which
may require stricter standards and enforcement, increased fines and penalties
for non-compliance, more stringent environmental assessments of proposed
projects and a heightened degree of responsibility for companies and their
officers, directors and employees.
Although compliance with such laws is not presently a significant
factor in our operations, there is no assurance that compliance with future
changes in environmental regulation, if any, will not adversely affect our
operations. See "Risk Factors".
1. Federal Environmental Regulation
Under the Canadian Constitution Act of 1983, the federal and provincial
governments have discrete areas of jurisdiction. For the most part,
responsibility for the environment is a matter which falls under provincial, not
federal, jurisdiction. As a result, federal legislation and regulations do not
materially affect the Company's operations.
The Canadian federal government does have an environmental assessment
process in place embodied in the Canadian Environmental Assessment Act. However,
a project will fall under the federal government's jurisdiction and be subject
to Canadian Environmental Assessment Act only if the federal government is:
1. involved in the project as a proponent; or
2. providing financial assistance to the project; or
3. involved in the project as vendor of land; or
4. involved in the project as a regulator of the project under a
provision listed in federal regulations.
None of these four situations apply to our operations and we do not
expect to be subject to Canadian Environmental Assessment Act.
2. Provincial Environmental Regulation
There are a number of provincial acts and regulations set forth below
(together with the Environmental Assessment Act and Regulations and other
provincial acts herein referred to as the "Provincial Laws") which we will or
may be required to comply with in some way. These are not expected to materially
affect our operations, except as indicated below.
25
Pursuant to the requirements of the Provincial Laws, we must provide
prior notice and a description of the planned exploration work before the
commencement of the work.
Work which involves mechanized activities such as drilling, trenching,
heavy mineral studies, airborne geophysical surveys, extensive use of off road
vehicles, establishment of a camp or other activities capable of causing ground
disturbance, water quality impairments or disruption to wildlife or wildlife
habitat, cannot commence until the plan has been reviewed by the Department of
Natural Resources and an Exploration Approval issued, on such terms and
conditions deemed necessary and prescribed by the Minister.
We do not believe that compliance with the Provincial Laws will have a
material adverse impact on our operations nor do we anticipate any difficulty in
obtaining approval from provincial authorities to commence mining operations if
and when warranted. In the event provincial approval is not granted, we may be
precluded from carrying on our mining operations.
Regulations
Our mineral exploration program is subject to the Canadian Mineral
Tenure Act Regulation. This act sets forth rules for
* locating claims
* posting claims
* working claims
* reporting work performed
We are also subject to the British Columbia Mineral Exploration Code
which tells us how and where we can explore for minerals. We must comply with
these laws to operate our business. Compliance with these rules and regulations
will not adversely affect our operations.
Environmental Law
We are also subject to the Health, Safety and Reclamation Code for
Mines in British Columbia. This code deals with environmental matters relating
to the exploration and development of mining properties. Its goals are to
protect the environment through a series of regulations affecting:
1. Health and Safety
2. Archaeological Sites
3. Exploration Access
We are responsible for providing a safe working environment, not
disrupting archaeological sites, and conducting our activities to prevent
unnecessary damage to the property.
26
We will secure all necessary permits for exploration and, if
development is warranted on the property, will file final plans of operation
before we start any mining operations. We anticipate no discharge of water into
active stream, creek, river, lake or any other body of water regulated by
environmental law or regulation. No endangered species will be disturbed.
Restoration of the disturbed land will be completed according to law. All holes,
pits and shafts will be sealed upon abandonment of the property. It is difficult
to estimate the cost of compliance with the environmental law since the full
nature and extent of our proposed activities cannot be determined until we start
our operations and know what that will involve from an environmental standpoint.
We are in compliance with the act and will continue to comply with the
act in the future. We believe that compliance with the act will not adversely
affect our business operations in the future.
We have never undergone bankruptcy, receivership, or similar
proceeding.
Employees
As of the date of this Prospectus, we employ one full time employee.
Description of Property
French Claim Property, British Columbia
- ---------------------------------------
Title
The French Claim Property is comprised of mineral claim number 374997
located in the Omineca Mining Division of the Province of British Columbia.
Under the terms of an option agreement dated May 10, 2001 (the "Agreement") with
Robin Day and Valley Gold Ltd. ("Valley Gold"), we were were granted an option
to acquire a 100% interest in the French Claim Property, that option to be
exercisable by us:
(a) paying to Valley Gold CAN$10,000 cash to be paid as follows:
(i) CAN$5,000 on the execution of the Agreement (which
amount has been paid);
(ii) CAN$5,000 on the date that is five (5) business days
after the receipt by us of written confirmation from
the U.S. Securities and Exchange Commission that our
registration statement under the Securities Act of
1933 has become effective (the "Approval Date");
(iii) CAN$15,000 on or before the first anniversary of the
Approval Date;
(iv) CAN$25,000 on or before the second anniversary of the
Approval Date;
27
(v) CAN$47,500 on or before the third anniversary of the
Approval Date;
(b) issuing to Valley Gold 10,000 of our common shares on or before
the Approval Date;
(c) paying or issuing to Valley Gold, either cash or our common
shares or any combination thereof as determined by us at our sole
discretion, as follows:
(i) cash or our common shares having a value of
CAN$15,000 on or before the first anniversary of
the Approval Date;
(ii) cash or our common shares having a value of
CAN$25,000 on or before the second anniversary of
the Approval Date;
(iii) cash or our common shares having a value of
CAN$47,500 on or before the third anniversary of
the Approval Date; and
(d) incurring Expenditures of not less than CAN$1,000,000 on or
before the fourth anniversary of the Approval Date, of which not
less than CAN$50,000 must be incurred on or before the first
anniversary of the Approval Date, not less than CAN$200,000, in
the aggregate, must be incurred on or before the second
anniversary of the Approval Date and of which not less than
CAN$500,000, in the aggregate, must be incurred on or before the
third anniversary of the Approval Date.
The value of our shares which might be issued under paragraph (c) above
will be determined by the average closing price for our common shares on any
recognized stock exchange or quotation system on which our common shares may be
listed for the thirty trading days prior to the particular anniversary of the
Approval Date for the period in which such common shares might be issued. As
additional consideration for the grant of the option, the parties agree that
Valley Gold will receive a royalty equal to two percent (2%) of Net Smelter
Returns.
Location, Access & Physiography
The French Claim Property is located about 60 kilometers north-northeast of
Smithers, British Columbia, at approximately 55 degrees 22'47''N and 126 degrees
54'01''W. It covers a five square kilometer area centred on Minfile 093M 014 -
(SNOW), and overlaps the eastern two thirds of the former RCM-1 Claim. Access is
from Smithers by truck to a nearby logging block and by helicopter to the 5,500
foot level. At present, there is no underground or surface plant or equipment on
the French Claim Property. The French Claim Property is situated less than three
kilometers west of the 6,600 foot French Peak. The property area is covered
mostly by alpine plateau meadows and treed creek valleys. The plateau is covered
by shallow overburden and frost heave boulders.
28
Exploration History
Prospecting and limited follow-up exploration work was undertaken on
the French Claim Property over a twenty year period by Mastodon-Highland Bell
Mines (1966-1969), Silver Standard Mines (1970-1971) and Ryan Exploration
Company (1984-1985).
Exploration work carried out by Mastodon-Highland Bell Mines Ltd.
("Mastodon-Highland") on the former RCM-1 claim (the eastern two-thirds of which
the French Claim Property overlaps) included prospecting, geochemical and
geophysical surveys (ground magnetic and induced polarization), 3.2 line
kilometres of bulldozer trenching, and geological mapping and rock sampling.
Mastodon-Highland allowed its mineral title to lapse in 1969 without filing a
public assessment report. Available data from this work is very limited. Rock
samples returned copper values up to 5,600 ppm; highly weathered and leached
bedrock returned lower values. One sample taken over 110 feet of weathered rock
averaged 0.22% Cu and 1.1 oz. Ag; another sample yielded 1.5 oz. Ag over 20
feet.
Silver Standard Mines Ltd. ("Silver Standard") staked the property as
soon as Mastodon-Highland dropped it in 1969. In 1970, rock sampling of trench
exposures was conducted at 100 foot intervals, yielding copper values up to
3,600 ppm. Exposures were described as predominantly highly weathered, leached,
sheared, and fractured, the fractures coated with kaolin and iron oxides.
In 1971, Silver Standard conducted a soil geochemical survey and
drilled five holes totalling 1,505 feet. Copper soil and trench values yielded
broad anomalies (contoured at >100 ppm, >400 ppm and >1,000 ppm intervals), one
in the northwestern trench area, and another in the Trench 11 - northern Trench
10 area. Adequate soil grids do not extend over most or all of Trenches 6 to 9,
and the southern half of Trench 10, where local copper trench/grid soil
anomalies were nevertheless detected.
Drilling was undertaken in the northwestern trench area, on the west
side of the strong copper-molybdenum-silver anomaly where it partially coincides
with the magnetic and chargeability anomalies identified by Mastodon-Highland,
as well as their aforementioned copper-silver anomaly in trench rocks near the
porphyry-hornfels contact area. All five holes were inclined -45(degree) toward
the northwest, west, and southwest, toward the hornfels, and in the general
topographic downslope direction. The drill core was systematically sampled,
predominantly across ten foot interval lengths.
Drill holes 1 to 4 cut pyrite-sericite feldspar porphyry, with moderate
to strong argillic alteration, closely to moderately spaced pyrite fractures,
and local chalcopyrite stringers + sphalerite. Molybdenite and tetrahedrite were
noted in places. Gypsum stringers and veinlets were encountered in holes 1 and
3. Magnetite and hematite were noted in places along fractures. Significant
fault gouge was intercepted.
Drill hole 5 intersected slightly magnetic, pyritic hornfels-fragmental
volcanics at 54 feet, though the nature of the contact with quartz feldspar
porphyry was not noted. Both units were described as exhibitting moderate
argillic alteration, moderate sericitization, 2-5% pyrite,
29
and 20-30 pyrite fractures or stringers per foot. Copper and molybdenum values
are anomalous across the contact, with 0.1% copper and 0.0065% molybdenum over
20 feet in quartz feldspar porphyry above the contact, 0.16% copper and 0.020%
molybdenum over 10 feet in the sample that contains the contact, and 0.12%
copper with 0.014% molybdenum over 10 feet in hornfels volcanics (pink-white
fragments in greenish-grey groundmass) immediately below the contact.
Drill core assays from the five holes average around 0.1% copper with
0.02% molybdenum. The highest grade copper mineralization intersected during the
drilling program was a 97 foot interval of 0.2% copper at the top of hole 3, in
altered porphyry. Included within this section are two 10 foot intervals of
0.29% copper beginning at 40 feet and 60 feet, and a 10 foot interval of 0.44%
copper beginning at 70 feet. Below this 97 foot section is a 30 foot interval of
bleached hornfels in fault contact, which returned 0.13% copper.
In 1984, Ryan Exploration Company Ltd. ("Ryan Exploration") staked the
RCM-1 Claim to cover a 2.1 ppm silver stream sediment anomaly released the
previous day on the Open File geochemical mapsheet 93M (Ministry of Energy,
Mines, and Petroleum Resources, June 26, 1984). During a one-day property
evaluation in 1984, prospecting, stream sediment and rock sampling was carried
out at a scale of 1:50,000. Five out of fourteen rock samples returned anomalous
to high copper, lead, zinc, silver and arsenic values. One sample taken from the
southern end of Trench 9 yielded more than 1% copper, 3,040 ppm lead, 7,680 ppm
zinc, 51.1 ppm silver, > 2,000 ppm arsenic and low gold. One of the two highest
copper values from 12 regional stream sediment samples was taken at the mouth of
the creek which directly drains the southeast part of the French Claim Property,
yielding 294 ppm copper, 106 ppm lead, 411 ppm zinc, 80 ppb gold, 2.6 ppm
silver, and 76 ppm arsenic.
In 1985, a total of 65 rock samples were taken. Despite leaching of
oxidized outcrops, trench rocks yielded 13 anomalous copper values above 400
ppm, the top five ranging from 0.11 to 0.48% copper (the latter is located at
the southern end of Trench 11, and returned low lead, zinc and arsenic, 80 ppb
gold and 7.9 ppm silver). The anomalous copper rock values are distributed
throughout the trench area of the property. Rock zinc anomalies (up to 0.28%)
are coincident with lead highs (up to 0.23%). Rock gold values are locally
weakly anomalous, and in the southern part of Trench 10 they coincide with
anomalous copper, lead, zinc, silver, and arsenic.
A total of 234 soil samples (+ rock chip fines) were also taken along
the trenches at 20 meter intervals, and along a widely spaced grid designed to
test the soil geochemical and VLM-EM16 response of this area (400 meter by 500
meter line spacing with 100 meter sampling).
Trench soil copper values commonly range from 150-400 ppm, and 22
samples yielded 0.1% - 0.24% copper. The trench soil samples yielded highly
enriched values in all aforementioned elements analysed, with >0.1% copper
anomalies in the northwestern trench area, in the Trench 11 area, and at the
south end of Trench 10. The widely spaced grid soil samples yielded lower
background base and precious metal values and may be a more accurate signature
of the underlying rocks. The soil grid was too widely spaced for valid
interpretation
30
of the results but showed that the area is geochemically responsive.
Exploration - Recent Results
A recent work program carried out by Valley Gold Ltd., one of the
optionors of the French Claim Property, included widely spaced soil trench
sampling for verification of historical results (42 samples). A suite of
eighteen trench rock samples was collected for petrology, whole rock
geochemistry and ICP analysis as part on an assessment of the surface level of
the porphyry system. The rock samples were not assayed for gold.
The trench soil geochemistry work carried out by Valley Gold confirms
the results obtained by Ryan Exploration in 1985. Anomalous copper values
(sixteen samples) range from >400 ppm to 3,269 ppm. The highest copper value is
located at the midpoint of Trench 5. Another anomaly is located at Trench 11.
These values coincide with anomalous to high molybdenum values as well as
anomalous Ag + Au. The highest gold value is 0.747 ppm, located at mid-Trench
10, accompanied by high lead-zinc-arsenic-silver and low copper-molybdenum. Gold
here may be associated with an outer arsenic-lead-zinc halo.
All of the eighteen trench rock samples were assayed. Of the five
hornfels samples taken from the northwest trench area, the highest copper value
was returned from a magnetic chloritic hornfels sample (Trench 1) with
interpreted propylitic alteration and finely disseminated chalcopyrite, yielding
1,529 ppm copper and low molybdenum, zinc, silver, and arsenic. Lower copper
values were returned from non-magnetic phyllic-siliceous hornfels samples,
except for a sample from Trench 4 with late vuggy quartz veins which yielded 668
ppm copper, 370 ppm molybdenum, 2,335 ppm zinc, 416 ppm lead, 8 g/t silver, and
220 ppm arsenic. This sample suggests the presence of late polymetallic veining
at hornfels-porphyry contact areas.
Of the thirteen porphyry samples taken from the trench area, elevated
to anomalous copper values (306 ppm to 1,796 ppm) were returned from most
samples in the northwestern trench area. One sample from Trench 3, at 995 ppm
copper was accompanied by 0.6 ppm silver and low arsenic, zinc, and molybdenum.
These samples exhibit strong phyllic alteration with quartz-pyrite veining,
shown to overprint potassic alteration at one locality. A sample along Trench 4,
exhibiting strong phyllic alteration and quartz-pyrite veinlet stockworks with
fine vein and vein-halo disseminated chalcopyrite, yielded the highest copper
value at 1,796 ppm, with 0.8 ppm silver, elevated zinc and low molybdenum. An
earlier vein set (quartz-pyrite-chalcopyrite-sericite-carbonate) is overprinted
by a pyrite-chalcopyrite vein set. A sample from the northern end of Trench 11
exhibits both phyllic and propylitic alteration with disseminated pyrite, and
chalcopyrite noted was not reflected in the assay. The sample from southern
Trench 8 is weakly altered. In southern Trench 9, a sample from a porphyry
window beneath hornfels yielded 479 ppm copper. A phyllic altered sample from
southern Trench 10 yielded 797 ppm zinc, and low copper-molybdenum. This zinc
result coincides with the aforementioned soil sample near this site which
yielded anomalous gold with high lead-zinc-arsenic-silver and low
copper-molybdenum.
Regional and Local Geology
31
The French Peak plutonic complex is located within the Stikine Terrane
of the Intermontane geomorphological belt, on the north flank of the Skeena
Arch, west-central British Columbia. In this area, Early to Middle Jurassic
Hazelton Group volcanic arc rocks are overlapped by marine to non-marine
sedimentary successions of the Late Jurassic Bowser Lake and Early Cretaceous
Skeena Groups. The Skeena Group sedimentary-volcanic arc rocks are unconformably
overlain by continental arc porphyritic andesites of the Late Cretaceous Kasalka
Group (85-65 Ma) and by continental volcanic arc rocks of the Early Eocene Ootsa
Lake Group.
The French Peak intrusive complex is classified as Late Cretaceous
(Bulkley age) and yielded a biotite date of ca. 71 Ma. Bulkley intrusions are
distributed along a 50 kilometer-wide belt parallel to the regional north to
northwest lithostructural trend. Within this belt are clusters of porphyry
copper and copper-molybdenum (+ Au) deposits and prospects, notably north to
northeast of Smithers in the vicinity of French Peak.
The porphyry intrusive rocks within the French claim form part of the
French Peak plutonic complex. The intrusive complex is contained within a
positive airborne magnetic area with a 10 kilometer N/S axis. The French Claim
Property overlies the southernmost of three hydrothermal centres in this axis.
The rocks underlying the French Peak area have been subjected to complex block
faulting, dominated by north-south regional faults.
In the area of the French Claim Property, at least the clastic
sedimentary Kitsuns Creek Formation, Skeena Group, comprising shale, mudstone,
siltstone and conglomerate, were intruded by a Bulkley intrusive complex and
metamorphosed to hornfels. Quartz monzonite is intruded by feldspar porphyry,
which in turn is intruded by biotite feldspar porphyry. The quartz monzonite may
be the causative pluton.
The rocks in the area are reportedly highly altered and oxidized, with
ubiquitous boxwork and vuggy gossans. The two main rock units are feldspar
porphyry (+ quartz + biotite) intrusive rocks, and hornfels-volcanic and
sedimentary rocks. Alteration types include various intensities of phyllic,
propylitic, K-silicate, and argillic.
An irregularly northwest-striking mafic dyke cuts across the western
half of the trench area on the French Claim Property, exposed in places along
the creek shown and at the southern Trench 10. The dyke exhibits the strongest
magnetic response on the ground survey map produced by Mastodon-Highland in
1968.
Whereas hornfels-porphyry contact relationships are not well
understood, in 1985, Ryan Exploration suggested a flat contact at the southern
part of Trench 9, with hornfels sediments overlying feldspar porphyry. The
hornfels appears to thinly cover the porphyry complex here, which would explain
the distribution of the rock units in the central trench area.
Prominent north-south regional faults may be reflected in the area of
the French Claim Property as linear ground magnetic lows. A north-striking fault
gouge runs along Trench 4, coincident and adjacent to linear ground magnetic
lows. Northwest- and west-striking fault
32
gouge was mapped in places at Trenches 1 and 5. A strong north-south lineament
is present along the western contact area, as is a strong east-west lineament,
possibly representative of block faulting.
A detailed petrographic report completed in 2000 on selected samples
concludes that, based on relict mineralogy, the porphyry complex is of quartz
monzonite to granodiorite composition. From whole-rock geochemistry, samples
plot in the granodiorite field, except one which reflects potassic alteration
(Trench 5).
The porphyries are variably altered, non-magnetic, with a fine-grained
to aphanitic, recrystallized-altered groundmass. Plagioclase-quartz porphyry is
dominant, with lesser biotite and rare K-feldspar. Plagioclase is commonly
strongly altered to sericite which is accompanied by carbonate and local
chlorite. Phyllic alteration (sericite-quartz-pyrite) has affected most of the
porphyry in the trench area and appears moderate to strong at least in the
central and northwestern parts. A sample from Trench 5 may exhibit a phyllic
alteration overprint of potassic (K-silicate) alteration. In a sample from
Trench 11, a weak phyllic alteration appears to overprint propylitic alteration.
A porphyry sample from Trench 4 exhibits quartz veinlet stockworks with
pyrite, chalcopyrite, minor sericite and carbonate cutting the moderate to
strong phyllic-altered host. This sample also contains 1-2% disseminated
anhedral chalcopyrite and 5-7% pyrite. Copper mineralization is interpreted to
be late and accompanied phyllic alteration.
Field observations suggest increasing alteration in the porphyry is
associated with increasing sulphides and stockwork veining. Millimetric,
grey-white, quartz pseudo-stockwork to stockwork veins host pyrite (average
2-5%, up to 20%), with chalcopyrite, galena, sphalerite and arsenopyrite noted
locally. The presence of tetrahedrite has also been reported, as well as
argentiferous massive pyrite veins.
Selected hornfels rock samples examined in the recent work program
carried out by Valley Gold were all taken from the west part of the trench area.
The hornfels is green to grey, locally banded, fine-grained, and siliceous with
3 to 12% fine disseminated pyrite. Probable protoliths for the hornfels include
finely bedded tuff/lithic crystal tuff and/or immature sediments. Chloritic
(propylitic) and/or quartz-sericite (phyllic) alteration is texturally
destructive. Only one of five samples is magnetic (southern end of Trench 1).
This sample contains an assemblage of epidote + disseminated
pyrite-magnetite-chalcopyrite, which are interpreted as propylitic.
The non-magnetic siliceous hornfels samples are phyllic-altered with no
appreciable carbonate and very little visible chalcopyrite. Fine quartz-pyrite
veinlets + fine fracture pyrite veinlets with little quartz were observed. The
phyllic alteration is believed to overprint propylitic alteration. However, the
latter is not distinguishable from contact metamorphic alteration.
33
Proposed Exploration
The French Claim Property is the subject of a compilation report dated
May, 2001 by Z.G. Arias, M.Sc., consulting geologist, which reviews all
available data respecting the French Claim Property. A primary conclusion of Mr.
Arias' report is that the copper-molybdenum-silver soil anomaly which extends
upslope and to the east of west-inclined drill holes, was not adequately tested.
In addition, exploration results to date warrant further geological, geochemical
and geophysical work toward the delineation of drill targets to test for a
low-grade to medium-grade, bulk tonnage, porphyry copper deposit.
Mr. Arias' report recommends that we carry out a four phase program of
exploration of the French Claim Property. Phase I will consist of geological
mapping of the entire property together with prospecting and soil sampling, at
an estimated cost of C$50,000. Phase II, contingent upon successful results from
Phase I, would consist of detailed follow-up sampling of geochemical anomalies
verified and/or detected during Phase I, trenching, geological trench mapping
and 750 meters of diamond drilling, at an estimated cost of C$150,000. Phase
III, contingent upon successful results from Phase II, would consist of 2,500
meters of diamond drilling, at an estimated cost of C$300,000. Phase IV,
contingent upon successful results from Phase III, would consist of 4,000 metres
of diamond drilling, at an estimated cost of C$500,000.
Despite the foregoing, the French Claim property is without known
reserves and the proposed program is exploratory in nature.
We do not have any policies or limitations in connection with
investment in real estate, interests in real estate, or investment in real
estate mortgages.
Leasehold
We currently occupy space rent-free in the residence of our
President on a month-to-month basis. We expect to continue to utilize this space
until the time when our operations require the hiring of additional personnel.
Equipment
We own a computer and are provided with access to telephone, fax and
copy services without cost on equipment owned by Mr. Mitsiadis, our President.
EXECUTIVE COMPENSATION
The following summary compensation table reflects all compensation
awarded to, earned by, or paid to our Chief Executive Officer and president and
our other executive officers who were serving as our executive officers as of
the end our last completed fiscal year for all services rendered to us in all
capacities during each of the years ended June 30, 1999, 2000 and 2001.
34
- ----------------------------------------------------------------------------------------
Summary Compensation Table
- ----------------------------------------------------------------------------------------
- ----------------------------------------- -------- -------------- ---------- -----------
All Annual
Name and Principal Position Year Salary Bonus Compensation
--------------------------- ---- ------ ----- ------------
(**)
- -------------------------------- -------- -------------- ---------- --------------------
- -------------------------------- -------- -------------- ---------- --------------------
Michael Mitsiadis 1999 $ 0 $ 0 $ 0
President 2000 $ 0 $ 0 $ 0
2001 $ 0 $ 0 $ 0
- -------------------------------- -------- -------------- ---------- --------------------
- -------------------------------- -------- -------------- ---------- --------------------
David Mallo 1999 $ 0 $ 0 $ 0
Secretary, director 2000 $ 0 $ 0 $ 0
2001 $ 0 $ 0 $ 0
- -------------------------------- -------- -------------- ---------- --------------------
Directors' Compensation
Except for our arrangement with David Mallo, under which he is
compensated for the provision of geological consulting services on a project by
project basis, we have no arrangements, standard or otherwise, pursuant to which
directors are compensated by us for their services in their capacity as
directors, or for committee participation, involvements in special assignments
or for services as consultant or expert. Mr. Mallo's fees are negotiated on a
project by project basis. Upon completion of this offering, Mr. Mallo will
receive CAN$3,000 (approximately $2,000) for consulting services rendered to us
with respect to Phase I of our exploration program.
None of our directors have received any manner of compensation for
services provided in their capacity as directors during our most recently
completed financial year.
Employment and Severance Agreement
There are no employment contracts or agreements between us and our
officers.
We do not have any employee stock option or other incentive plans.
We do not have any compensatory plan or arrangement which will result
from the resignation, retirement or other termination of employment of any
directors or executive officers or from a change of our control, or a change in
any of their responsibilities following a change of control.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the Securities and Exchange Commission a
registration statement on Form SB-2. This prospectus, which is a part of the
registration statement, does not contain all of the information included in the
registration statement. Some information is omitted and you should refer to the
registration statement and its exhibits. With respect to references made in this
prospectus to any of our contracts, agreements or other documents,
35
those references are not necessarily complete and you should refer to the
exhibits attached to the registration statement for copies of the actual
contract, agreement or other document.
Our registration statement and other filings with the Securities and
Exchange Commission can be reviewed by accessing the Securities and Exchange
Commission's Internet site at http://www.sec.gov, which contains reports, proxy
and information statements and other information regarding registrants that file
electronically with the Securities and Exchange Commission.
We intend to send an annual report, including audited financial
statements, to our shareholders. We will also file annual, quarterly and current
reports, proxy statements and other information with the Securities and Exchange
Commission. You may read and copy any reports, statements or other information
on file at the public reference rooms. You can also request copies of these
documents, for a copying fee, by writing to the Securities and Exchange
Commission.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There have been no transactions during the last two years, or proposed
transactions, to which we were or are a party in which any of our directors,
officers, shareholders owning more than 5% of our securities or members of their
family had or have a material interest.
Michael Mitsiadis is our sole promoter. Westar Capital Corp, a
corporation controlled by Mr. Mitsiadis, purchased 4,000,000 shares of our
common stock in consideration for payment to us of $0.001 per share.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
Our previous auditor, Barry L. Friedman, passed away on January 27,
2001. The auditor's report on our financial statements for either of the past
two years did not contain an adverse opinion or disclaimer of opinion nor was it
modified as to uncertainty, audit scope of accounting principles. There were no
disagreement with the former auditor or any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure.
On June 22, 2001, we engaged Richard M. Prinzi, CPA to audit our
financial statements for the years ended June 30, 2001 and June 30, 2000.
36
INDEX TO
FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2001 AND 2000
------------------------------------------
CONTENTS
-----------
Page
Report of Independent Public Accountants 38
Financial statements:
Balance Sheets 39
Statement of Operations 40
Statements of Changes in Shareholders' Equity 41
Statements of Cash Flows 42
Notes to financial statements 43
37
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To The Board of Directors Global-Tech Capital Corp.:
We have audited the accompanying balance sheets of Global-Tech Capital Corp. (a
Nevada corporation in the development stage) as of June 30, 2001 and June 30,
2000, and the related statements of operations, changes in shareholders' equity
and cash flows for the periods from July 1, 2000 through June 30, 2001 and July
1, 1999 to June 30, 2000. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Global-Tech Capital Corp. as of
June 30, 2001 and June 30, 2000, and the related statements of operations,
changes in shareholders' equity and cash flows for the periods from July 1, 2000
through June 30, 2001 and July 1, 1999 to June 30, 2000, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note #1 to the financial
statements, the Company has no established source of revenue. This raises
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are described in Note #1. The financial
statements do not include any adjustments that might result from the outcome for
this uncertainty.
Staten Island, New York
July 16, 2001
38
Global -Tech Capital Corp., Inc.
(A Development Stage Company)
Balance Sheet
Assets
June 30, June 30,
2001 2000
------------------------------------------
Current Assets:
Cash & Cash Equivalents $ 31,735.90 $ 459.67
------------------------------------------
Total Current Assets 31,735.90 459.67
Other Assets:
Intangible Assets 3,267.97 -
------------------------------------------
Total Assets $ 35,003.87 $ 459.67
==========================================
Liabilities And Shareholders' Equity
Total Liabilities - -
------------------------------------------
Shareholders' Equity:
Common stock, $.001 par value, 200,000,000 shares
authorized, 10,151,400 shares issued and outstanding $ 10,151.00 $ 10,085.00
Additional Paid in Capital 78,349.00 12,415.00
------------------------------------------
Total Stockholders' Equity 88,500.00 22,500.00
Loss accumulated during the development stage (53,496.13) (22,040.33)
------------------------------------------
Total Shareholders' Equity 35,003.87 459.67
------------------------------------------
Total Liabilities and Shareholders' Equity $ 35,003.87 $ 459.67
==========================================
See Accompanying Notes to Financial Statements
39
Global -Tech Capital Corp., Inc.
(A Development Stage Company)
Statement of Operations
For the period
July 21, 1998 For the period For the period
(Date of Inception) July 1, 2000 July 1, 1999
To December To June To June
31, 2001 30, 2001 30, 2000
Income:
Realized Loss on Investments $ (17,289.38) $ (17,289.38) -
Interest 9.91 9.91 -
--------------------------------------------------------------------------------
Total Income (17,279.47) (17,279.47) -
Expenses:
Office 326.24 300.74 25.50
Legal & Professional 33,500.00 12,500.00 21,000.00
Bank Charges 214.53 79.70 70.20
Taxes & State Fees 2,175.89 1,295.89 210.00
--------------------------------------------------------------------------------
Total Expenses 36,216.66 14,176.33 21,305.70
--------------------------------------------------------------------------------
Loss Accumulated During The
Development Stage
$ (53,496.13) $ (31,455.80) $ (21,305.70)
==================================================================================
Loss per Common Share $ (.0053) $ (.0031) $ (.0021)
==================================================================================
Weighted Average of Common
Shares Outstand
10,118,400 10,085,400 10,085,400
==================================================================================
See Accompanying Notes to Financial Statements
40
Global -Tech Capital Corp., Inc.
(A Development Stage Company)
Statement of Changes in Shareholders' Equity
Common Stock
---------------------------- Loss Accumulated
Additional During the
Paid In Development
Shares Par Value Capital Stage Total
-----------------------------------------------------------------------------------
For the period July 21, 1998
(date if inception)
Through June 30, 2000
- ----------------------------
Issuance of stock 10,085,400 $10,085.00 $12,415.00 $22,500.00
Loss Accumulated During the
Development Stage $ (22,040.33) (22,040.33)
---------------------------------------------------------------------------------------
Balance, June 30, 2000 10,085,400 10,085.00 12,415.00 (22,040.33) 459.67
For the period July 1, 2000
To June 30, 2001
- ----------------------------
Issuance of stock 66,000 66.00 65,934.00 66,000.00
Loss Accumulated During the (31,455.80)
Development Stage (31,455.80)
---------------------------------------------------------------------------------------
Balance, June 30, 2001 10,151,400 $10,151.00 $78,349.00 $ (53,496.13) $ 35,003.87
=======================================================================================
See Accompanying Notes to Financial Statements
41
Global -Tech Capital Corp., Inc.
(A Development Stage Company)
Statement of Cash Flows
For the period For the period For the period
July 21, 1998 July 1, 2000 July 1, 1999
(Date of Inception) to June 30, 2001 To June 30, 2000
To June 30, 2001
--------------------------------------------- ------------------------
Cash Flows From Operating Activities:
Loss Accumulated During
the Development Stage $ (53,496.13) $ (31,455.80) $ (22,040.33)
Net (increase) decrease in Other Assets (3,267.97) (3,267.97) -
------------------------ ------------------------ -----------------------
Net Cash Used in Operating Activities (56,764.10) (34,723.77) (22,040.33)
------------------------ ------------------------ -----------------------
Cash Flows From Investing Activities:
Net (increase) decrease in Fixed Assets - - -
------------------------ ------------------------ -----------------------
------------------------ ------------------------ -----------------------
Net Cash Used in Investing Activities - - -
------------------------ ------------------------ -----------------------
Cash Flow From Financing Activities:
Proceeds from issuance of common stock 88,500.00 66,000.00 88,500.00
------------------------ ------------------------ -----------------------
Net Cash Provided By Financing Activities 88,500.00 66,000.00 88,500.00
------------------------ ------------------------ -----------------------
Net Increase in Cash: 31,735.90 31,276.23 31,735.90
------------------------ ------------------------ -----------------------
Cash, beginning of period - 459.67 -
------------------------ ------------------------ -----------------------
Cash, end of period $ 31,735.90 $ 31,735.90 $ 459.67
======================== ======================== =======================
See Accompanying Notes to Financial Statements
42
Global -Tech Capital Corp., Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. COMPANY INFORMATION
Global-Tech Capital Corp., ("The Company") was organized July 21, 1998, under
the laws of the State of Nevada, as Global-Tech Capital Corp. The Company is
currently in the development stage. Management has elected a June 30 year-end
for the Company. The Company will be in the development stage until it raises
the required capital and begins the exploration of the property.
The Company is engaged in the location, acquisition, exploration and, if
warranted, development of a mineral resource property, the rights of which are
currently held, and following the successful consummation of this offering
intends to initiate an exploration program of the property. The property
currently contains no proven reserves and failure to locate ore reserves may
adversely affect the economic viability of the Company. Even if the results of
exploration are encouraging, the Company will require additional funds through
the sale of equity or debt securities, other borrowings or possibly a joint
venture to develop the property.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash & Cash Equivalents
For the purpose of the statement of cash flows, cash equivalents include all
highly liquid investments, with a maturity of three months or less.
Basis of Financial Statements
These financial statements are prepared on the accrual basis of accounting in
conformity with generally accepted accounting principles.
Income Taxes
Income taxes are accounted for in accordance with Statement of Financial
Accounting Standards No.109, "Accounting for Income Taxes". Under this method,
deferred income taxes are determined based on differences between the tax basis
of assets and liabilities and their financial reporting amounts at each year
end, and are measured based on enacted tax rates and laws that will be in
43
Global -Tech Capital Corp., Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
Income Taxes (Continued)
effect when the differences are expected to reverse. Valuation allowances
are established, when necessary, to reduce deferred tax assets to the
amount expected to be realized. No provision for income taxes is
included in the statement due to its immaterial amount.
Utilization of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Net Income Per Common Share
Net income per common share is computed based on the weighted average number of
common shares outstanding and common stock equivalents, if not anti-dilutive.
NOTE 3. CAPITAL STOCK
The Company is offering the right to subscribe for 2,000,000 shares at $.05 per
share on an all or none basis. Therefore, all 2,000,000 shares must be sold
before the offering can be completed. The shares will be sold through the
President and Directors of the Company and no compensation is to be paid to any
person for the offer and sale of the shares.
The Company's Certificate of Incorporation authorizes the issuance of
200,000,000 shares of common stock. The Company's Board of Directors has the
power to issue any or all of the authorized but unissued common stock without
stockholder approval. To the extent that additional shares of common stock are
issued, dilution to the interest of the Company's stockholders participating in
the Offering will occur.
There are presently outstanding 10,151,400 shares of the Company's Common Stock
for which a relatively nominal consideration was paid. In contrast, the
purchasers of the shares offered are providing the Company with $100,000 of
funding. Purchasers of the shares will represent 16% of all shares outstanding,
44
Global -Tech Capital Corp., Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 3. CAPITAL STOCK (Continued)
although they will have provided the major portion of the Company's funding to
date. The purchasers of the shares offered in the Company's offering will
have no effective voice in the Company's management and the Company will be
controlled by the existing stockholders.
Upon any liquidation, dissolution or winding up of the Company, holders of
shares of Common Stock are entitled to receive pro rata all of the assets of the
Company available for distribution to holders of shares of the Company's Common
Stock. Moreover, in the event such a liquidation were to occur all stockholders
of the Company including those owning shares purchased privately at less than
the public offering price, will receive the liquidated assets on a pro-rata
basis (as opposed to being based on the amounts paid for such shares).
NOTE 4. INCOME TAXES
The Company had available at June 30, 2001 and June 30, 2000, $53,496.13 and
$22,040.33, respectively, of unused operating loss carry forwards that may be
applied against future taxable income and expire in various years beginning
2019.
45
GLOBAL-TECH CAPITAL CORP.
2,000,000 Shares of
Common Stock
--------------------
PROSPECTUS
--------------------
_________, 2001
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Except as discussed below, there is no charter provision, bylaw,
contract, arrangement or statute under which any officer or director of the
registrant is insured or indemnified in any manner against any liability which
he may incur in his capacity as such.
Indemnification of Directors and Officers
Section 78.7502 of the Corporation Laws of the State of Nevada provides
for the indemnification of the company's officers, directors and corporate
employees and agents under certain circumstances as follows:
AUTHORIZATION FOR INDEMNIFICATION OF DIRECTORS AND OFFICERS
1. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys' fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and
46
that, with respect to any criminal action or proceeding, he had reasonable
cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprises against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation. Indemnification may not be made for
any claim, issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to above, or in defense of any claim, issue
or matter therein, the corporation shall indemnify him against expenses,
including attorneys' fees, actually and reasonably incurred by him in connection
with the defense.
Section 78.751 of the Nevada Corporation Law, as amended, sets forth
the authorization required for discretionary indemnification, advancement of
expenses and limitations thereon as follows:
1. Any discretionary indemnification under Section 78.7502 of the Nevada
Corporation Laws, unless ordered by a court or advanced pursuant to subsection 2
below, may be made by the corporation only as authorized in the specific case
upon a determination that indemnification of the director, officer, employee or
agent is proper in the circumstances. The determination must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum consisting of
directors who were not parties to the action, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who were not
parties to the action, suit or proceeding so orders, by independent
legal counsel in a written opinion; or
(d) If a quorum consisting of directors who were not parties to the action,
suit or proceeding cannot be obtained, by independent legal counsel in
a written opinion.
2. The articles of incorporation, the bylaws or an agreement made by the
corporation may provide that the expenses of officers and directors incurred in
defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of
47
the final disposition of the action, suit or proceeding, upon receipt of an
undertaking by or on behalf of the director or officer to repay the amount if it
is ultimately determined by a court of competent jurisdiction that he is not
entitled to be indemnified by the corporation. The provisions of this subsection
do not affect any rights to advancement of expenses to which corporate personnel
other than directors or officers may be entitled under any contract or otherwise
by law.
3. The indemnification and advancement of expenses authorized in or
ordered by a court pursuant to this section:
(a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under
the articles of incorporation or any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, for either an
action in his official capacity or an action in another capacity while
holding his office, except that indemnification, unless ordered by a
court pursuant to Section 78.7502 of the Nevada Corporation Law or for
the advancement of expenses made pursuant to subsection 2, may not be
made to or on behalf of any director or officer if a final adjudication
establishes that his acts or omissions involved intentional misconduct,
fraud or a knowing violation of the law and was material to the cause
of action.
(b) Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors and
administrators of such a person.
Section 78.752 of the Nevada Corporation Law provides for the
situations in which a corporation shall have the power to purchase and
maintain insurance for indemnification of directors, officers,
employees and agents.
The Securities and Exchange Commission's Policy on Indemnification
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to any provisions contained in its certificate of
incorporation, or by-laws, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether indemnification by it is against public policy
as expressed in the Act and will be governed by the final adjudication of such
issue.
Our bylaws provide for the indemnification by us to the fullest extent
permitted by the Nevada Corporation Laws of every person who was or is a party
or is threatened to be made a party to or is involved in any action, suit or
proceeding by reason of the fact that he or a person of whom he is a legal
representative is or was a Director or officer of the corporation
48
or is or was serving at the request of the corporation or for its benefit as a
Director or officer of another corporation, or as its representative in an
enterprise.
The indemnification provided by our bylaws is not exclusive of any
other rights to which those indemnified may be entitled under any agreement,
vote of shareholders or disinterested directors, provision of law or otherwise.
The Company may purchase and maintain insurance on behalf of any person
who is or was a Director or officer of the corporation, or is or was serving at
the request of the corporation as a Director or officer of another corporation,
or as its representative in an enterprises against liability asserted against
such person and incurred in such capacity or arising out of such status, whether
or not the corporation would have the power to indemnify such person.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth an itemization of various expenses,
all of which we will pay, in connection with the sale and distribution of the
securities being registered. All of the amounts shown are estimates, except the
Securities and Exchange Commission registration fee.
Securities and Exchange Commission Registration Fee $ 25.00
Accounting Fees and Expenses $ 3,500.00
Legal Fees and Expenses $ 40,000.00
Transfer Agents Fees $ 500.00
Printing Costs $ 500.00
Blue Sky Fees and Expenses $ 1,000.00
EDGAR Filing Fees $ 3,000.00
Miscellaneous $ 475.00
-----------
Total $49,000.00
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
Set forth in chronological order is information regarding shares of
common stock sold by the company during the past three years. Also included is
the consideration, if any, received by the Company for such shares and
information relating to the section of the Securities Act of 1933 (the
"Securities Act"), or rule of the Securities and Exchange Commission under which
exemption from registration was claimed.
In March, 1999, the Company offered and sold to Westar Capital Corp., a
British Columbia corporation controlled by Michael Mitsiadis, the Company's
President, 4,000,000 shares of its common stock at a price of $.001 per share
for total consideration of $4,000. The Company believes that such transaction
was exempt from registration by virtue of Rule 504 of Regulation D thereunder.
Form D was filed on April 1, 1999.
49
In March, 1999, the Company offered and sold to twelve persons who are
non-accredited investors, 6,000,000 shares of its common stock at a price of
$.001 per share for total consideration of $6,000. The Company believes that
such transactions were exempt from the registration requirements of the
Securities Act by virtue of Rule 504 of Regulation D thereunder. Form D was
filed on April 1, 1999.
In April, 1999, the Company offered and sold 81,000 shares of its
common stock to nine persons who are not accredited investors at a price of $.10
per share for total consideration of $8,100. The Company believes that such
transactions were exempt from the registration requirements of the Securities
Act by virtue of Rule 504 of Regulation D thereunder. Form D was filed on May 6,
1999.
In April, 1999 the Company offered and sold 4,400 shares of its common
stock to fourteen persons who are not accredited investors at a price of $1.00
per share for total consideration of $4,400. The Company believes that such
transactions were exempt from the registration requirements of the Securities
Act by virtue of Rule 504 of Regulation D thereunder. Form D was filed on May 6,
1999.
On December 15, 2001, the Company offered and sold 66,000 shares of its
common stock to Nell M. Dragovan at a price of $1.00 per share for total
consideration of $66,000. The Company believes that such transaction was exempt
from the registration requirements of the Securities Act pursuant to Regulation
S.
ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(A) EXHIBITS
The following Exhibits are attached hereto:
EXHIBIT DESCRIPTION OF EXHIBIT AND FILING REFERENCE
NUMBER
3.1 Articles of Incorporation
3.2 Bylaws
5.1 Opinion of Sierchio & Company, LLP, regarding the legality
of the securities being registered
10 Agreement between the Company, Robin Day and Valley Gold, Ltd.
23.1 Consent of Sierchio & Company, LLP. (included in Exhibit 5.1)
23.2 Consent of Richard M. Prinzi, Jr.
50
ITEM 28. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under Item 24 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
In the event that a claim for indemnification against such liabilities
(other than the payment by the small business issuer of expenses incurred of
paid by a director, officer or controlling person of the small business issuer
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the small business issuer will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
51
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorizes this registration
statement to be signed on its behalf by the undersigned, in the City of Burnaby,
Province of British Columbia, on the ____ day of September, 2001.
GLOBAL-TECH CAPITAL CORP.
By: -/s/ Michael Mitsiadis-----------------
---------------------------------------
Michael Mitsiadis
President and Chief Financial Officer
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on the dates stated:
SIGNATURE TITLE DATE
/s/ Michael Mitsiadis President and Director ______________
- ---------------------
Michael Mitsiadis (principal executive and financial officer)
/s/David Mallo Secretary and Director _______________
- ------------------
David Mallo
/s/ Douglas Turnbull Director _______________
- ---------------------------
Douglas Turnbull
52
EXHIBIT INDEX
The following Exhibits are attached hereto:
EXHIBIT DESCRIPTION OF EXHIBIT AND FILING REFERENCE PAGE
NUMBER
3.1 Articles of Incorporation 54
3.2 Bylaws 58
5.1 Opinion of Sierchio & Company, LLP, regarding the legality
of the securities being registered 69
10 Agreement between the Company, Robin Day and Valley Gold, Ltd. 71
23.1 Consent of Sierchio & Company, LLP. (included in Exhibit 5.1)
23.2 Consent of Richard M. Prinzi, Jr. 87
53
EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
GLOBAL-TECH CAPITAL CORP.
* * * * * * *
The undersigned, acting as incorporator, pursuant to the provisions of
the laws of the State of Nevada relating to private corporation, hereby adopts
the following Articles of Incorporation:
ARTICLE ONE. [NAME] The name of the corporation is:
-----------
GLOBAL-TECH CAPITAL CORP.
ARTICLE TWO. [RESIDENT AGENT].The initial agent for service of
----------- process is Nevada Agency and Trust Company, 50 West
Liberty Street, Suite 880, City of Reno, County of Washoe, State of Nevada
89501.
ARTICLE THREE. [PURPOSES]. The purpose for which the
------------- corporation is organized are to engage in any activity or
business not in conflict with the laws of the State of Nevada or of the United
States of America, and without limiting the generality of the foregoing,
specifically:
I. [OMNIBUS]. To have to exercise all the powers
now or hereafter conferred by the laws of the State of Nevada
upon corporations organized pursuant to the laws under which
the corporation is organized and any and all acts amendatory
thereof and supplemental thereto.
II. [CARRYING ON BUSINESS OUTSIDE STATE]. To conduct and carry
on its business or any branch thereof in any state or
territory of the United States or in any foreign country in
conformity with the laws of such state, territory, or foreign
country, and to have and maintain in any state, territory, or
foreign country a business office, plant, store or other
facility.
III. [PURPOSES TO BE CONSTRUED AS POWERS]. The purposes
specified herein shall be construed both as purposes and
powers and shall be in no way limited or restricted by
reference, or inference from, the terms of any other clause in
this or any other article, but the purposes and powers
specified in each of the clauses herein shall be regarded as
independent purposes and powers, and the enumeration of
specific purposes and powers shall not be construed to limit
or restrict in any powers of the corporation; nor shall the
expression of one thing be deemed to exclude another, although
it be of like nature not expressed.
54
ARTICLE FOUR. [CAPITAL STOCK]. The corporation shall have
------------ authority to issue an aggregate of TWO HUNDRED
MILLION (200,000,000) Common Capital Shares, PAR VALUE ONE MILL
($0.001) per share for a total capitalization of TWO HUNDRED
THOUSAND DOLLARS ($200,000).
The holders of shares of capital stock of the corporation
shall not be entitled to pre-emptive or preferential rights to
subscribe to any unissued stock or any other securities which the
corporation may now or hereafter be authorized to issue.
The corporation's capitals tock may be issued and sold from
time to time for such consideration as may be filed by the Board of
Directors, provided that the consideration so fixed is not less than
par value.
The stockholders shall not possess cumulative voting rights at
all shareholders meetings called for the purpose of electing a board of
Directors.
ARTICLE FIVE. [DIRECTORS]. The affairs of the
------------ corporation shall be governed by a Board of
Directors of no more than eight (8) nor less than one (1) person. The
names and address of the first Board of Directors are:
NAME ADDRESS
Michael Mitsiadis 2365 Paulus Crescent
Burnaby, British Columbia
Canada V5A 2M2
Richard Howes 1304-1323 Homer Street
Vancouver, British Columbia
Canada V6B 5T1
ARTICLE SIX. [ASSESSMENT OF STOCK]. The capital stock
----------- of the corporation, after the amount of the
subscription price or par value has been paid in, shall not be subject
to pay debts of the corporation, and no paid up stock and no stock
issued as fully paid up shall ever be assessable or assessed.
ARTICLE SEVEN. [INCORPORATION]. The name and address of the
-------------- incorporator of the corporation is as follows:
NAME ADDRESS
---- -------
Amanda Cardinalli 50 West Liberty Street, Suite 880
Reno, Nevada 89501
55
ARTICLE EIGHT. [PERIOD OF EXISTENCE]. The period of
-------------- existence of the corporation shall be
perpetual.
ARTICLE NINE. [BY-LAWS]. The initial By-laws of the
------------- corporation shall be adopted by its Board of
Directors. The power to alter, amend, or repeal the By-laws, or to
adopt new By-laws, shall be vested in the Board of Directors, except as
otherwise may be specifically provided by the By-laws.
ARTICLE TEN. [STOCKHOLDERS' MEETINGS]. Meetings of
------------ stockholders shall be held at such place within
or without the State of Nevada as may be provided by the By-laws of the
corporation. Special meetings of the stockholders may be called by the
President or any other executive officer of the corporation, the Board of
Directors, or any member thereof, or by the record holder or holders of at
least ten percent (10%) of all shares entitled to vote at the meeting. Any
action otherwise required to be taken at a meeting of the stockholders,
except election of directors, may be taken without a meeting if a consent
in writing, setting forth the action so taken, shall be signed by
stockholders having at least a majority of the voting power.
ARTICLE ELEVEN. [CONTRACTS OF CORPORATION]. No contract or
--------------- other transaction between the corporation and
any other corporation, whether or not a majority of the shares of the
capital stock of such other corporation is owned by this corporation, and
no act of this corporation shall in any way be affected or invalidated by
the fact that any of the directors of this corporation are pecuniarily or
otherwise interested in, or are directors or officers of such other
corporation. Any director of this corporation, individually, or any firm of
which such director may be a member, may be a party to, or may be
pecuniarily or otherwise interested in any contract or transaction of the
corporation; provided, however, that the fact that he or such firm is so
interested shall be disclosed or shall have been known to the Board of
Directors of this corporation, or a majority thereof; and any director of
this corporation who is also a director or officer of such other
corporation, or who is so interested, may be counted in determining the
existence of a quorum at any meeting of the Board of Directors of this
corporation that shall authorize such contract or transaction, and may vote
thereat to authorize such contract or transaction, with like force and
effect as if he were not such director or officer of such other corporation
or not so interested.
ARTICLE TWELVE. [LIABILITY OF DIRECTORS AND OFFICERS].
-------------- No director or officer shall have any personal
liability to the corporation or its stockholders for damages for breach of
fiduciary duty as a director or officer, except that this Article Twelve
shall not eliminate or limit the liability of a director or officer for (i)
acts or omissions which involve intentional misconduct, fraud or a knowing
violation of law, or (ii) the payment of dividends in violation of the
Nevada Revised Statutes.
56
IN WITNESS WHEREOF, the undersigned incorporator has hereunto
affixed her signature at Reno, Nevada this 20th day of July 1998.
-------------------------------
AMANDA CARDINALLI
STATE OF NEVADA }
- ----------------------------
:
COUNTY OF WASHOE }
- ----------------------------
On the 20th day of July, 1998, before me, the undersigned, a
Notary Public in and for the State of Nevada, personally appeared AMANDA
CARDINALLI, known to me to be the person described in and who executed the
foregoing instrument, and who acknowledged to me that she executed the same
freely and voluntarily for the uses and purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year first above written.
---------------------------------
NOTARY PUBLIC
Residing in Reno, Nevada
My Commission expires
October 10, 1998
- ----------------
57
EXHIBIT 3.2
BY LAWS
OF
GLOBAL TECH CAPITAL CORP.
A Nevada Corporation
ARTICLE 1
---------
Offices
Section 1. The registered office of this corporation shall be in the City of
Reno, State of Nevada.
Section 2. The Corporation may also have offices at such other places both
within and without the State of Nevada as the Board of Directors may from time
to time determine or the business of the corporation may require.
ARTICLE 2
---------
Meetings of Stockholders
Section 1. All annual meetings of the stockholders shall be held at the
registered office of the corporation or at such other place within or without
the State of Nevada as the Directors shall determine. Special meetings of the
stockholders may be held at such time and place within or without the State of
Nevada as shall be stated in the notice of the meeting, or in a duly executed
waiver of notice thereof.
Section 2. Annual meetings of the stockholders shall be held on the anniversary
date of incorporation each year if not a legal holiday and, if a legal holiday,
then on the next secular day following, or at such other time as may be set by
the Board of Directors from time to time, at which the stockholders shall elect
by vote a Board of Directors and transact such other business as may properly be
brought before the meeting.
Section 3. Special meetings of the stockholders, for any purpose or purposes,
unless otherwise prescribed by statue or by the Articles of Incorporation, may
be called by the President or the Secretary, by resolution of the Board of
Directors or at the request in writing of stockholders owning a majority in
amount of the entire capital stock of the corporation issued and outstanding and
entitled to vote. Such request shall state the purpose of the proposed meeting.
Section 4. Notices of meetings shall be in writing and signed by the President
or Vice-President or the Secretary or an Assistant Secretary or by such other
person or persons as the Directors shall designate. Such notice shall state the
purpose or purposes for which the meeting is called and the time and the place,
which may be within or without this State, where it
58
is to be held. A copy of such notice shall be either delivered personally to or
shall be mailed, postage prepaid, to each stockholder of record entitled to
vote at such meeting not less than ten nor more than sixty days before such
meeting. If mailed, it shall be directed to a stockholder at his address as it
appears upon the records of the corporation and upon such mailing of any such
notice, the service thereof shall be complete and the time of the notice shall
being to run from the date upon which such notice is deposited in the mail for
transmission to such stockholder.Personal delivery of any such notice to an
officer of the corporation or association, or to any member of a partnership
shall constitute delivery of such notice to such corporation, association or
partnership. In the event of the transfer of stock after delivery of such
notice of and prior to the holding of the meeting, it shall not be necessary to
deliver or mail such notice of the meeting to the transferee.
Section 5. Business transactions at any special meeting of stockholders shall be
limited to the purpose stated in the notice.
Section 6. The holders of a majority of the stock issued and outstanding and
entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statue or by the Articles of
Incorporation. If, however, such quorum shall not be present or represented at
any meeting of the stockholders, the stockholders entitled to vote thereat,
present in person or represented by proxy, shall have power to adjourn the
meeting from time to time, without notice other than announcements at the
meeting, until a quorum shall be presented or represented. At such adjourned
meetings at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
notified.
Section 7. When a quorum is present or represented at any meeting, the vote of
holders of 10% of the stock having voting power present in person or represented
by proxy shall be sufficient to elect Directors or to decide any question
brought before such meeting, unless the question is one upon which by express
provision of the statute or of the Articles of Incorporation, a different vote
shall govern and control the decision of such question.
Section 8. Each stockholder of record of the corporation shall be entitled at
each meeting of the stockholders to one vote for each share standing in his name
on the books of the corporation. Upon the demand of any stockholder, the vote
for Directors and the vote upon any question before the meeting shall be by
ballot.
Section 9. At any meeting of the stockholders any stockholder may be represented
and vote by a proxy or proxies appointed by an instrument in writing. In the
event that any such instrument in writing shall designate two or more persons to
act as proxies, a majority of such persons present at the meeting, or, if only
one shall be present, then that one shall have and may exercise all the powers
conferred by such written instruction upon all of the persons so designated
unless the instrument shall otherwise provide. No proxy or power of attorney to
vote shall be voted at a meeting of the stockholders unless it shall have been
filed with the Secretary of the meeting when required by the inspectors of
election. All questions regarding the qualifications of voters, the validity of
proxies and the acceptance of or rejection of votes shall be decided by the
inspectors of election who shall be appointed by the Board of Directors, or if
not so appointed, then by the presiding officer at the meeting.
59
Section 10. Any action which may be taken by the vote of the stockholders at a
meeting may be taken without a meeting if authorized by the written consent of
stockholders holding at least a majority of the voting power, unless the
provisions of the statue or the Articles of Incorporation require a greater
proportion of voting power to authorize such action in which case such greater
proportion of written consents shall by required.
ARTICLE 3
---------
Directors
Section 1. The business of the corporation shall be managed by its Board of
Directors which may exercise all such powers of the corporation and do all such
lawful acts and things as are not by statute or by the Articles of Incorporation
or by these Bylaws directed or required to be exercised or done by the
stockholders.
Section 2. The number of Directors which shall constitute the whole board shall
be not less than one and not more than eight. The number of Directors may from
time to time be increased or decreased to not less than one nor more than eight
by action of the Board of Directors. The Directors shall be elected at the
annual meeting of the stockholders and except as provided in section 2 of this
Article, each Director elected shall hold office until his successor is elected
and qualified. Directors need not be stockholders.
Section 3. Vacancies in the Board of Directors including those caused by an
increase in the number of Directors, may be filed by a majority of the remaining
Directors, though less than a quorum, or by a sole remaining Director, and each
Director so elected shall hold office until his successor is elected at the
annual or a special meeting of the stockholders. The holders of a two-thirds of
the outstanding shares of stock entitled to vote may at any time peremptorily
terminate the term of office of all or any of the Directors by vote at a meeting
called for such purpose or by a written statement filed with the Secretary or,
in his absence, with any other officer. Such removal shall be effective
immediately, even if successors are not elected simultaneously and the vacancies
on the Board of Directors resulting therefrom shall only be filled from the
stockholders.
A vacancy or vacancies on the Board of Directors
shall be deemed to exist in case of death, resignation or removal of any
Director, or if the authorized number of Directors be increased, or if the
stockholders fail at any annual or special meeting of stockholders at
which any Director or Directors are elected to elect the full authorized number
of Directors to be voted for at that meeting.
The stockholders may elect a Director or Directors
at any time to fill any vacancy or vacancies not filled by the Directors. If
the Board of Directors accepts the resignation of a Director tendered to take
effect at a future time, the Board or the stockholders shall have power to elect
a successor to take office when the resignation is to become effective.
No reduction of the authorized number of Directors
shall have the effect of removing any Director prior to the expiration of his
term of office.
60
ARTICLE 4
---------
Meeting of the Board of Directors
Section 1. Regular meetings of the Board of Directors shall be held at any place
within or without the State which has been designated from time to time by
resolution of the Board or by written consent of all members of the Board. In
the absence of such designation regular meetings shall be held at the registered
office of the corporation. Special meetings of the Board may be held either at a
place so designated or at the registered office.
Section 2. The first meeting of each newly elected Board of Directors shall be
held immediately following the adjournment of the meeting of stockholders and at
the place thereof. No notice of such meeting shall be necessary to the Directors
in order legally to constitute the meeting, provided a quorum be present. In the
event such meeting is not so held, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the Board of Directors.
Section 3. Regular meetings of the Board of Directors may be held without call
or notice at such time and at such place as shall from time to time be fixed and
determined by the Board of Directors.
Section 4. Special meetings of the Board of Directors may be called by the
Chairman or the President or by the Vice-President or by any two Directors.
Written notice of the time and place of special meetings shall be delivered
personally to each Director, or sent to each Director by mail or by other form
of written communication, charges prepaid, addressed to him at his address as it
is shown upon the records or if not readily ascertainable, at the place in which
the meetings of the Directors are regularly held. In case such notice is mailed
or telegraphed, it shall be deposited in the postal service or delivered to the
telegraph company at least forty-eight (48) hours prior to the time of the
holding of the meeting. In case such notice is delivered or taxed, it shall be
so delivered or taxed at least twenty-four (24) hours prior to the time of the
holding of the meeting. Such mailing, telegraphing, delivery or taxing as above
provided shall be due, legal and personal notice of such Director.
Section 5. Notice of the time and place of holding an adjourned meeting need not
be given to the absent Directors if the time and place be fixed at the meeting
adjourned.
Section 6. The transaction of any meeting of the Board of Directors, however
called and noticed or wherever held, shall be as valid as though transacted at a
meeting duly held after regular call and notice, if a quorum be present, and if,
either before or after such meeting, each of the Directors not present signs a
written waiver of notice, or a consent of holding such meeting, or approvals of
the minutes thereof. All such waivers, consents or approvals shall be filed with
the corporate records or made a part of the minutes of the meeting.
Section 7. The majority of the authorized number of Directors shall be necessary
to constitute a quorum for the transaction of business, except to adjourn as
hereinafter provided. Every act or decision done or made by a majority of the
Directors present at a meeting duly held at which a quorum is present shall be
regarded as the act of the Board of Directors, unless a greater number be
required by law or by the Articles of Incorporation. Any action of a majority,
61
although not at a regularly called meeting, and the record thereof, if assented
to in writing by all of the other members of the Board shall be as valid and
effective in all respects as if passed by the Board in regular meeting.
Section 8. A quorum of the Directors may adjourn any Directors meeting to meet
again at stated day and hour; provided, however, that in the absence of a
quorum, a majority of the Directors present at any Directors meeting, either
regular or special, may adjourn from time to time until the time fixed for the
next regular meeting of the Board.
ARTICLE 5
---------
Committees of Directors
Section 1. The Board of Directors may, by resolution adopted by a majority of
the whole Board, designate one or more committees of the Board of Directors,
each committee to consist of two or more of the Directors of the corporation and
may have power to authorize the seal of the corporation to be affixed to all
papers which may require it. Such committee or committees shall have such name
or names as may be determined from time to time by the Board of Directors. The
members of any such committee present at any meeting and not disqualified from
voting may, whether or not they constitute a quorum, unanimously appoint another
member of the Board of Directors to act at the meeting in the place of any
absent or disqualified member. At meetings of such committees, a majority of the
members or alternate members at any meeting at which there is a quorum shall be
the act of the committee.
Section 2. The committee shall keep regular minutes of their proceedings and
report the same to the Board of Directors.
Section 3. Any action required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken without a meeting if
a written consent thereto is signed by all members of the Board of Directors or
of such committee, as the case may be, and such written consent is filed with
the minutes of proceedings of the Board or committee.
ARTICLE 6
---------
Compensation of Directors
Section 1. The Directors may be paid their expenses of attendance at each
meeting of the Board of directors and may be paid a fixed sum for attendance at
each meeting of the board of Directors or a stated salary as Director. No such
payment shall preclude any Director from serving the corporation in any other
capacity and receiving compensation therefore. Members of special or standing
committees may be allowed like reimbursement and compensation for attending
committee meetings.
ARTICLE 7
---------
Notices
Section 1. Notices to Directors and stockholders shall be in writing and
delivered
62
personally or mailed to the Directors or stockholders at their
addresses appearing on the books of the corporation. Notices to Directors may
also be given by fax and by telegram. Notice by mail, fax or telegram shall be
deemed to be given at the time when the same shall be mailed.
Section 2. Whenever all parties entitled to vote at any meeting, whether of
Directors or stockholders, consent, either by a writing on the records of the
meeting or filed with the Secretary, or by presence at such meeting or oral
consent entered on the minutes, or by taking part in the deliberations at such
meeting without objection, the doings of such meeting shall be as valid as if
had at a meeting regularly called and noticed, and at such meeting any business
may be transacted which is not excepted from the written consent to the
consideration of which no objection for want of notice is made at the time, and
if any meeting be irregular for want of notice or such consent, provided a
quorum was present at such meeting, the proceedings of said meeting may be
ratified and approved and rendered likewise valid and the irregularity or defect
therein waived by a writing signed by all parties having the right to vote at
such meeting; and such consent or approval of stockholders may be by proxy or
attorney, but all such proxies and powers of attorney must be in writing.
Section 3. Whenever any notice whatever is required to be given under the
provisions of the statue, of the Articles of Incorporation or of these Bylaws, a
waiver thereof in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE 8
---------
Officers
Section 1. The officers of the corporation shall be chosen by the Board of
Directors and shall be a President, a Secretary and a Treasurer. Any person may
hold two or more offices.
Section 2. The Board of Directors at its first meeting after each annual meeting
of stockholders shall choose a Chairman of the Board who shall be a Director,
and shall choose a President, a Secretary and a Treasurer, none of whom need be
Directors.
Section 3. The Board of Directors may appoint a Vice-Chairman of the Board,
Vice-Presidents and one or more Assistant Secretaries and Assistant Treasurers
and such other officers and agents as it shall deem necessary who shall hold
their offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the Board of Directors.
Section 4. The salaries and compensation of all officers of the corporation
shall be fixed by the Board of Directors.
Section 5. The officers of the corporation shall hold office at the pleasure of
the Board of Directors. Any officer elected or appointed by the Board of
Directors may be removed any time by the Board of Directors. Any vacancy
occurring in any office of the corporation by death, resignation, removal or
otherwise shall be filled by the Board of Directors.
63
Section 6. The Chairman of the Board shall preside at meetings of the
stockholders and the Board of Directors, and shall see that all orders and
resolutions of the Board of Directors are carried into effect.
Section 7. The Vice-Chairman shall, in the absence or disability of the Chairman
of the Board, perform the duties and exercise the powers of the Chairman of the
Board and shall perform other such duties as the Board of Directors may from
time to time prescribe.
Section 8. The President shall be the chief executive officer of the corporation
and shall have active management of the business of the corporation. He shall
execute on behalf of the corporation all instruments requiring such execution
except to the extent the signing and execution thereof shall be expressly
designated by the Board of Directors to some other officer or agent of the
corporation.
Section 9. The Vice-Presidents shall act under the direction of the President
and in absence or disability of the President shall perform the duties and
exercise the powers of the President. They shall perform such other duties and
have such other powers as the President or the Board of Directors may from time
to time prescribe. The Board of Directors may designate one or more Executive
Vice-Presidents or may otherwise specify the order of seniority of the
Vice-Presidents. The duties and powers of the President shall descend to the
Vice-Presidents in such specified order of seniority.
Section 10. The Secretary shall act under the direction of the President.
Subject to the direction of the President he shall attend all meetings of the
Board of Directors and all meetings of the stockholders and record the
proceedings. He shall perform like duties for the standing committees when
required. He shall give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the Board of Directors, and will perform
other such duties as may be prescribed by the President or the Board of
Directors.
Section 11. The Assistant Secretaries shall act under the direction of the
President. In order of their seniority, unless otherwise determined by the
President or the Board of Directors, they shall, in the absence or disability of
the Secretary, perform the duties and exercise the powers as the President and
the Board of Directors may from time to time prescribe.
Section 12. The Treasurer shall act under the direction of the President.
Section Subject to the direction of the President he shall have custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all money and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the corporation as may be ordered by
the President or the Board of Directors, at its regular meetings, or when the
Board of Directors so required, and account of all his transactions as Treasurer
and of the financial condition of the corporation.
If required by the Board of Directors, the Treasurer
shall give the corporation a bond in such sum and with such surety as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his
64
control belonging to the corporation.
Section 13. The Assistant Treasurers in order of their seniority, unless
otherwise determined by the President or the Board of Directors, shall, in the
absence or disability of the Treasurer, perform the duties and exercise the
powers of the Treasurer. They shall perform such other duties and have such
other powers as the President or the Board of Directors may from time to time
prescribe.
ARTICLE 9
---------
Certificates of Stock
Section 1. Every stockholder shall be entitled to have a certificate signed by
the President or a Vice-President and the Treasurer or an Assistant Treasurer,
or the Secretary or an Assistant Secretary of the corporation, certifying the
number of shares owned by him in the corporation. If the corporation shall be
authorized to issue more than one class of stock or more than one series of any
class, the designations, preferences and relative, participating, optional or
other special rights of the various classes of stock or series thereof and the
qualifications, limitations or restrictions of such rights, shall be set forth
in full or summarized on the face of back of the certificate which the
corporation shall issue to represent such stock.
Section 2. If a certificate is signed (a) by transfer agent other than the
corporation or its employees or (b) by a registrar other than the corporation or
its employees, the signatures of the officers of the corporation may be
facsimiles. In case any officer who has signed or whose facsimile signatures
have been placed upon a certificate shall cease to be such officer before such
certificate is issued, such certificate may be issued with the same effect as
though the person had not ceased to be such officer. The seal of the
corporation, or a facsimile thereof, may, but need not be, affixed to
certificates of stock.
Section 3. The Board of Directors may direct a new certificate of certificates
to be issued in place of any certificate or certificates theretofore issued by
the corporation alleged to have been lost or destroyed upon the making of an
affidavit of that fact by the person claiming the certificate of stock to be
lost or destroyed. When authorizing such issue of a new certificate or
certificates, the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost or destroyed
certificate or certificates, or his legal representative, to advertise the same
in such manner as it shall require and/or give the corporation a bond in such
sum as it may direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been lost or
destroyed.
Section 4. Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duty endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the corporation, if it is satisfied that all provisions of the laws and
regulations applicable to the corporation regarding transfer and ownership of
shares have been complied with, to issue a new certificate to the person
entitled thereto, cancel the old certificate and record the transaction upon its
books.
Section 5. The Board of Directors may fix in advance a date not exceeding sixty
(60) days nor less than ten (10) days preceding the date of any meeting of
stockholders, or the date of
65
the payment of any dividend, or the date of the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining the consent of stockholders for
any purpose, as a record date for the termination of the stockholders entitled
to notice of and to vote at any such meeting, and any adjournment thereof, or
entitled to receive payment of any such dividend, or to give such consent, and
in the such case, such stockholders, and only such stockholders as shall be
stockholders of record on the date so fixed, shall be entitled to notice of and
to vote at such meeting, or any adjournment thereof, or the receive such payment
of dividend, or to receive such allotment of rights, or to exercise such rights,
or to give such consent, as the case may be, notwithstanding any transfer of
any stock on the books of the corporation after such record date fixed as
aforesaid.
Section 6. The corporation shall be entitled to recognize the person registered
on its books as the owner of the share to be the exclusive owner for all
purposes including voting and dividends, and the corporation shall not be bounds
to recognize any equitable or other claims to or interest in such shares or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of Nevada.
ARTICLE 10
----------
General Provisions
Section 1. Dividends upon the capital stock of the corporation, subject to the
provisions of the Articles of Incorporation, if any, may be declared by the
Board of Directors at any regular or special meeting, pursuant to law. Dividends
may be paid in cash, in property or in shares of the capital stock, subject to
the provisions of the Articles of Incorporation.
Section 2. Before payment of any dividend, there may be set aside out of any
funds of the corporation available for dividends such sum or sums as the
Directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends or for
repairing and maintaining any property of the corporation, or for such other
purpose as the Directors shall think conducive to the interests of the
corporation, and the Directors may modify or abolish any such reserve in the
manner in which it was created.
Section 3. All checks or demands for money and notes of the corporation shall be
signed by such officer or officers or such other person or persons as the Board
of Directors may from time to time designate.
Section 4. The fiscal year of the corporation shall be fixed by resolution of
the Board of Directors.
Section 5. The corporation may or may not have a corporate seal, as may be from
time to time determined by resolution of the Board of Directors. If a corporate
seal is adopted, it shall have inscribed thereon the name of the corporation and
the words "Corporate Seal" and "Nevada". The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or in any manner reproduced.
66
ARTICLE 11
----------
Indemnification
Every person who was or is a party or is a threatened to be made a
party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he or a
person of whom he is the legal representative is or was a Director or officer of
the corporation or is or was serving at the request of the corporation or for
its benefit as a Director or officer of another corporation, or as its
representative in a partnership, joint venture, trust or other enterprise, shall
be indemnified and held harmless to the fullest legally permissible under the
General Corporation Law of the State of Nevada from time to time against all
expenses, liability and loss (including attorney's fees, judgments, fines and
amounts paid or to be paid in settlement) reasonably incurred or suffered by him
in connection therewith. The expenses of officers and Directors incurred in
defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding upon receipt of an undertaking by or on behalf of the
Director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation. Such right of indemnification shall be a contract right which may
be enforced in any manner desired by such person. Such right of indemnification
shall not be exclusive of any other right which such Directors, officers or
representatives may have or hereafter acquire and, without limiting the
generality of such statement, they shall be entitled to their respective rights
of indemnification under any bylaw, agreement, vote of stockholders, provision
of law or otherwise, as well as their rights under this Article.
The Board of Directors may cause the corporation to purchase and
maintain insurance on behalf of any person who is or was a Director or officer
of the corporation, or is or was serving at the request of the corporation as a
Director or officer of another corporation, or as its representative in a
partnership, joint venture, trust or other enterprise against any liability
asserted against such person and incurred in any such capacity or arising out of
such status, whether or not the corporation would have the power to indemnify
such person.
The Board of Directors may from time to time adopt further Bylaws with
respect to indemnification and amend these and such Bylaws to provide at all
times the fullest indemnification permitted by the General Corporation Law of
the State of Nevada.
ARTICLE 12
----------
Amendments
Section 1. The Bylaws may be amended by a majority vote of all the stock issued
and outstanding and entitled to vote at any annual or special meeting of the
stockholders, provided notice of intention to amend shall have been contained in
the notice of the meeting.
Section 2. The Board of Directors by a majority vote of the whole Board at any
meeting may amend these Bylaws, including Bylaws adopted by the stockholders,
but the stockholders may from time to time specify particulars of the Bylaws
which shall not be amended by the Board of Directors.
67
APPROVED AND ADOPTED: December 12, 1998
CERTIFICATE OF THE SECRETARY
----------------------------
Michael Mitsiadis, hereby certify that I am the Secretary of Global Tech Capital
Corp., and the foregoing Bylaws, consisting of 11 pages, constitute the code of
Bylaws of this company as duly adopted at a regular meeting of the Board of
Directors of the corporation held on December 12, 1998.
IN WITNESS WHEREOF, I have hereunto subscribed my name on December 12, 1998.
- --------------------------------
Secretary Treasurer and Director
68
EXHIBIT 5.1
- -----------
SIERCHIO & COMPANY, LLP
ATTORNEYS
150 East 58th Street, 25th Floor
New York, New York 10155
PHONE (212) 446-9500 - TELEFAX (212) 446-9504
September 5, 2001
Global-Tech Capital Corp.
P.O. Box 84037
Burnaby, B.C.
V5A 4T9 Canada
Re: Global-Tech Capital Corp.
Registration Statement on Form SB-2
Dear Sir or Madam:
We have acted as counsel for Global-Tech Capital Corp., a corporation
existing under the laws of the State of Nevada (the "Company") in connection
with the preparation and filing of a registration statement on Form SB-2 (the
"Registration Statement") relating to the registration and the offer and sale by
the Company of 2,000,000 of the Company's shares of common stock, $0.001 par
value (the "Common Shares").
In this connection, we have examined such documents, corporate records,
officers' certificates and other instruments as we have deemed necessary or
appropriate for purposes of this opinion, including, but not limited to, (i) the
Company's Certificate of Incorporation and Bylaws, and (ii) the Registration
Statement. We have assumed the legal capacity to sign and the genuineness of all
signatures of all persons executing instruments or documents examined or relied
upon by us and have assumed the conformity with the original documents of all
documents examined by us as copies of such documents.
Based upon and subject to the foregoing, we are of the opinion that
when offered and sold as described in the Registration Statement, the Common
Shares will be validly issued, fully paid and non-assessable.
69
SIERCHIO & COMPANY, LLP
We are members of the bar of the States of New York and New Jersey and
do not hold ourselves out as being conversant with the laws of any jurisdiction
other than those of the United States of America and the State of New York.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not thereby concede that
we are within the category of persons whose consent is required under the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours
Sierchio & Company, LLP
By: ___________________________
Joseph Sierchio
70
Exhibit 10
- ----------
OPTION AGREEMENT
----------------
THIS AGREEMENT made as of the 10th day of May, 2001
BETWEEN:
ROBIN DAY, businessman, having an office at 13416 -- 103
Avenue, Edmonton, Alberta, T5N 0S4
("Day")
OF THE FIRST PART
AND:
VALLEY GOLD LTD., a body corporate having an office
at 58 Canova Road, Calgary, Alberta, T2W 2A6
("VG")
OF THE SECOND PART
AND:
GLOBAL TECH CORP., a body corporate having an office
at Suite 2000, 1055 West Hastings Street, Vancouver,
British Columbia, V6E 2E9
("GTC")
OF THE SECOND PART
RECITALS:
A. Day is the legal and VG is the beneficial owner of an
undivided one hundred percent (100%) interest in the Property as more
particularly described in Schedule "A" attached to and made a part of this
Agreement;
B. Day and VG wish to grant and GTC wishes to acquire an
undivided one hundred percent (100%) interest in the Property on the terms
and subject to the conditions set out in this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration
of the premises and of the mutual promises, covenants, conditions,
representations and warranties herein set out, the parties hereto agree as
follows:
71
1. INTERPRETATION
--------------
1.1 For the purposes of this Agreement, including the recitals and any schedules
hereto, unless there is something in the subject matter or context inconsistent
therewith, the following words and expressions shall have the following
meanings:
(a) "Affiliate" shall have the meaning attributed to it by the
Company Act (British Columbia);
(b) "Agreement" means this Agreement, as amended from time to
time;
(c) "Approval Date" means the date that is five (5) business days
after the receipt by GTC of written confirmation from the U.S.
Securities and Exchange Commission that GTC's registration
statement under The Securities Act of 1933 has become
effective;
(d) "Commercial Production" means the operation of the Property or
any portion thereof as a producing mine and the production of
mineral products therefrom (excluding bulk sampling, pilot
plant or test operations);
(e) "Expenditures" mean all cash, expenses, obligations
and liabilities, other than for personal injury or property
damage, of whatever kind or nature spent or incurred
directly or indirectly in connection with the exploration,
development or equipping of the Property or any portion
thereof for Commercial Production including, without
limiting the generality of the foregoing, monies expended in
constructing, leasing or acquiring all facilities,
buildings, machinery and equipment in connection with Mining
Work, in paying any taxes, fees, charges, payments or rentals
(including payments in lieu of assessment work) or
otherwise to keep the Property or any portion thereof in good
standing (including any payment to or in respect of
acquiring any agreement or confirmation from any holder
of surface rights respecting the Property or any portion
thereof), in carrying out any survey of the Property or
any portion thereof, in doing geophysical, geochemical
and geological surveys, in drilling, assaying,
metallurgical testing, bulk sampling and pilot plant
operations, in preparing any reports and in supervising and
managing any work done with respect to and for the benefit of
the Property or any portion thereof, or in any other
respects necessary for the due carrying out of Mining Work
and in paying the fees, wages, salaries, travelling
expenses, fringe benefits (whether or not required by law)
of all persons engaged in work with respect to and for the
benefit of the Property or any portion thereof, in paying
for the food, lodging and other reasonable needs of such
persons and a charge equal to fifteen percent (15%) of
Expenditures (exclusive of such charge) as a management fee;
(f) "Mining Work" means every kind of work done on or in respect
of the Property or the products therefrom by or under the
direction of or on behalf of or for the benefit of a party
and, without limiting the generality of the foregoing,
includes assessment work, geophysical, geochemical and
geological surveying, studies and mapping, investigating,
drilling, designing, examining, equipping, improving,
surveying, shaft sinking, raising, crosscutting and drifting,
searching for, digging,
72
trucking, sampling, working and procuring minerals,
ores, metals, and concentrates, surveying and bringing
any mineral claims or other interests to lease or
patent, reporting and all other work usually considered to be
prospecting, exploration, development and mining work;
(g) "Net Smelter Returns" shall have the meaning ascribed to it
in Schedule "B" hereto;
(h) "Option" means the option granted by the Optionor to GTC
under Section 3.1 of this Agreement;
(i) "Optionor" means Day and VG
(j) "Production Notice" means a notice which is given to each
of the parties in which it is proposed to place the
Property into Commercial Production;
(k) "Property" means those mineral properties more particularly
described in Schedule "A" hereto together with the surface
rights, mineral rights, personal property and permits
associated therewith, and shall include any renewal thereof
and any other form of successor or substitute title thereto.
1.2 In this Agreement, all dollar amounts are expressed in lawful currency of
Canada unless specifically provided to the contrary.
1.3 The titles to the respective Articles hereof shall not be deemed to be a
part of this Agreement but shall be regarded as having been used for convenience
only.
1.4 Words used herein importing the singular number shall include the plural,
and vice--versa, and words importing the masculine gender shall include the
feminine and neuter genders, and vice--versa, and words importing persons shall
include firms, partnerships and corporations.
2. REPRESENTATIONS AND WARRANTIES
------------------------------
2.1 GTC represents and warrants to the Optionor that:
(a) it is a company duly incorporated, validly subsisting and in
good standing with respect to filing of annual reports under
the laws of the jurisdiction of its incorporation;
(b) it has full power and authority to carry on its business and
to enter into this Agreement and any agreement or instrument
referred to in or contemplated by this Agreement and to carry
out and perform all of its obligations and duties hereunder;
(c) it has duly obtained all authorizations for the execution,
delivery and performance of this Agreement, and such
execution, delivery and performance and the consummation of
the transactions herein contemplated will not conflict with,
or accelerate the performance required by or result in any
breach of any covenants or agreements contained in or
constitute a default under, or result in the creation of any
encumbrance, lien or charge under the provisions of its
constating or initiating documents or any indenture, agreement
or other instrument whatsoever to which it
73
is a party or by which it is bound or to which it may be
subject and will not contravene any applicable laws.
2.2 The Optionor represents and warrants to GTC that:
(a) Day is the sole legal owner and VG is the sole beneficial
owner of a one hundred percent (100%) undivided interest
in and to the Property;
(b) the Property is in good standing under the laws of the
Province of British Columbia up to and including March 31,
2006;
(c) to the best of its knowledge, there are no environmental and
reclamation liabilities related to the Property resulting from
any mineral exploration, development or processing activities
conducted on the Property prior to the execution of this
Agreement;
(d) the Property is free and clear of all liens, charges and
encumbrances and is not subject to any right, claim or
interest of any other person;
(e) it has complied with all laws in effect in the Province of
British Columbia with respect to the Property and such
Property has been duly and properly staked and recorded in
accordance with such laws and that GTC may enter in, under or
upon the Property for all purposes of this Agreement without
making any payment to, and without accounting to or obtaining
the permission of, any other person other than any payment
required to be made under this Agreement; and
(f) there is no adverse claim or challenge against or to the
ownership of or title to the Property, or any portion thereof
nor is there any basis therefor and there are no outstanding
agreements or options to acquire or purchase the Property or
any portion thereof or interest therein and no person has any
royalty or interest whatsoever in production or profits from
the Property or any portion thereof and the Property is not
the whole or substantially the whole of its undertaking.
2.3 The representations and warranties hereinbefore set out are conditions on
which the parties have relied in entering into this Agreement, are to be
construed as both conditions and warranties and shall, regardless of any
investigation which may have been made by or on behalf of any party as to the
accuracy of such representations and warranties, survive the closing of the
transaction contemplated hereby. Each of the parties will indemnify and save the
other harmless from all loss, damage, costs, actions and suits arising out of or
in connection with any breach of any representation or warranty contained in
this Agreement. In addition to any other remedy to which it may be entitled,
each party shall be entitled to set off any such loss, damage or costs suffered
by it as a result of any such breach against any payment required to be made by
it to any other party hereunder.
3. OPTION
------
3.1 The Optionor hereby grants to GTC the sole and exclusive right and option to
acquire an undivided one hundred percent (100%) interest in the Property, free
and clear of all liens, charges, encumbrances, claims, rights or interest of any
person, such option to be exercisable by
74
GTC:
(a) paying to the Optionor Ten Thousand Dollars ($10,000) cash to be
paid as follows:
(i) Five Thousand Dollars ($5,000) on the execution of
this Agreement;
(ii) Five Thousand Dollars ($5,000) on the Approval Date;
(iii) Fifteen Thousand Dollars ($15,000) on or before the
first anniversary of the Approval Date;
(iv) Twenty Five Thousand Dollars ($25,000) on or before
the second anniversary of the Approval Date;
(v) Forty Seven Thousand Five Hundred Dollars ($47,500)
on or before the third anniversary of the Approval
Date; and
(b) issuing to the Optionor 10,000 common shares of GTC on or before
the Approval Date;
(c) paying or issuing to the Optionor, either cash or common shares of
GTC or any combination thereof as determined by GTC at its sole
discretion, as follows:
(i) cash or common shares of GTC having a value of
Fifteen Thousand Dollars ($15,000) on or before the
first anniversary of the Approval Date;
(ii) cash or common shares of GTC having a value of Twenty
Five Thousand Dollars ($25,000) on or before the
second anniversary of the Approval Date;
(iii) cash or common shares of GTC having a value of Forty
Seven Thousand Five Hundred Dollars ($47,500) on or
before the third anniversary of the Approval Date;
and
(d) incurring Expenditures of not less than One Million Dollars
($1,000,000) on or before the fourth anniversary of the Approval
Date, of which not less than Fifty Thousand Dollars ($50,000)
must be incurred on or before the first anniversary of the
Approval Date, not less than Two Hundred Thousand Dollars
($200,000), in the aggregate, must be incurred on or before the
second anniversary of the Approval Date and of which not less
than Five Hundred Thousand Dollars ($500,000), in the aggregate,
must be incurred on or before the third anniversary of the
Approval Date.
The value of the shares which might be issued under paragraph (c) above will be
determined by average closing price for the common shares of GTC on any
recognized stock exchange or quotation system on which the common shares of GTC
may be listed for the thirty trading days prior to the particular anniversary of
the Approval Date for the period in which such common shares might be issued.
3.2 As additional consideration for the grant of the Option, the parties agree
that the Optionor will receive a royalty equal to two percent (2%) of Net
Smelter Returns, payable in
75
accordance with the terms of Schedule "B" hereto.
4. RIGHT OF ENTRY
--------------
4.1 Except as otherwise provided in this Agreement, until the Option is
exercised or terminated in accordance with the terms of this Agreement, GTC, its
servants and agents shall have the sole and exclusive right to:
(a) enter in, under or upon the Property and conduct Mining Work;
(b) exclusive and quiet possession of the Property;
(c) bring upon the Property and to erect thereon such mining
facilities as it may consider advisable; and
(d) remove from the Property ore or mineral products for the purpose
of bulk sampling, pilot plant or test operations.
4.2 The Optionor covenants with GTC that it shall, forthwith upon the execution
of this Agreement, deliver to GTC all maps, drill logs, reports and any and all
other technical, engineering and geological data relating to the Property.
5. POWERS, DUTIES AND OBLIGATIONS OF GTC
-------------------------------------
5.1 GTC shall have full right, power and authority to do everything necessary or
desirable to carry out an exploration program on the Property and to determine
the manner of exploration and development of the Property and, without limiting
the generality of the foregoing, the right, power and authority to:
(a) regulate access to the Property, subject only to the right of the
Optionor and its representatives to have access to the Property at
all reasonable times for the purpose of inspecting work being done
thereon but at their own risk and expense;
(b) employ and engage such employees, agents and independent
contractors as it may consider necessary or advisable to carry
out its duties and obligations hereunder and in this connection
to delegate any of its powers and rights to perform its duties
and obligations hereunder but GTC shall not enter into
contractual relationships except on terms which are commercially
competitive;
(c) execute all documents, deeds and instruments, do or cause to be
done all such acts and things and give all such assurances as may
be necessary to maintain good and valid title to the Property and
the Optionor hereby irrevocably constitutes GTC its true and
lawful attorney to give effect to the foregoing; and
(d) conduct such title examinations and cure such title defects as
may be advisable in the reasonable judgment of GTC.
5.2 GTC shall have the duties and obligations to:
76
(a) keep the Property free and clear of all liens and encumbrances
arising from its operations hereunder (except liens contested in
good faith by GTC) and in good standing by the doing and filing,
or payment in lieu thereof, of all necessary assessment work and
payment of all taxes required to be paid and by the doing of all
other acts and things and the making of all other payments
required to be made which may be necessary in that regard;
(b) permit the Optionor and its representatives, duly authorized by
it, in writing, at their own risk and expense, access to the
Property at all reasonable times and to all records prepared by
GTC in connection with Mining Work; GTC shall prepare and deliver
to the Optionor not less frequently than annually, reports on all
Mining Work conducted by GTC;
(c) perform its duties and obligations hereunder in a sound and
workmanlike manner, in accordance with sound mining and
engineering practices and in substantial compliance with all
applicable federal, provincial, territorial and municipal laws,
by-laws, ordinances, rules and regulations and this Agreement;
(d) obtain and maintain or cause any contractor engaged by it
hereunder to obtain and maintain, during any period in which
active work is carried out hereunder, not less than the following:
(i) employer's liability insurance covering each employee
engaged in the operations hereunder to the extent of
One Million Dollars ($1,000,000) where such
employee is not covered by Worker's Compensation;
(ii) comprehensive general liability insurance in such
form as may be customarily carried by a prudent
operator for similar operations with a bodily
injury, death and property damage limit of One
Million Dollars ($1,000,000) inclusive;
(iii) vehicle, aircraft and watercraft insurance covering
all aircraft, vehicles and watercraft owned and
non-owned, operated and/or licensed by GTC, with a
bodily injury, death and property damage limit of
Five Million Dollars ($5,000,000) inclusive;
(e) arrange for and maintain Worker's Compensation or equivalent
coverage for all eligible employees engaged by GTC in accordance
with local statutory requirements;
(f) maintain true and correct books, accounts and records of
operations hereunder.
6. VESTING OF INTEREST
-------------------
6.1 Forthwith upon GTC exercising the Option by GTC's performance of the
requirements of Section 3.1, an undivided one hundred percent (100%) interest in
and to the Property shall vest, and shall be deemed for all purposes hereof to
have vested, in GTC.
6.2 The Optionor covenants and agrees to deliver to GTC, forthwith upon
receiving notice from GTC that the Option has been exercised, a recordable
transfer, or such other
77
instrument as may be required, of a one hundred percent (100%) interest in
and to the Property in the name of GTC and GTC shall be entitled to record
such transfer documents in the appropriate office in the jurisdiction in which
the Property is located.
6.3 The parties acknowledge the right of GTC to file, register or to otherwise
deposit a copy or a memorandum of this Agreement in the appropriate recording
office for the jurisdiction in which the Property is located and with any other
governmental agencies to give third parties notice of this Agreement, and hereby
agree, each with the others, to do or cause to be done all acts or things
reasonably necessary to effect such filing, registration or deposit.
7. TERMINATION OF OPTION
---------------------
7.1 In the event of default in the performance of the requirements of Section
3.1 by GTC, then subject to the provisions of Sections 7.2, 7.3 and 16.1 of this
Agreement, the Option and this Agreement shall terminate.
7.2 GTC shall have the right to terminate this Agreement by giving thirty (30)
days written notice of such termination to the Optionor and upon the effective
date of such termination this Agreement shall be of no further force and effect
except GTC shall be required to satisfy any obligations which have accrued under
the provisions of this Agreement which have not been satisfied.
7.3 Notwithstanding any other provisions of this Agreement, in the event of
termination of this Agreement, GTC shall deliver to the Optionor all data,
reports and samples pertaining to the Property and shall ensure that the
Property is in good standing for at least one year from the date of termination
of this agreement by the filing of assessment work or by paying cash in lieu
thereof.
8. CONFIDENTIALITY
---------------
8.1 All information and data concerning or derived from the Mining Work shall be
kept confidential and, except to the extent required by law or by regulation of
any securities commission, stock exchange or other regulatory body, shall not be
disclosed to any person other than its professional advisors, financial advisors
or an Affiliate unless such persons have first executed a confidentiality
agreement in favour of all parties or to any other person without the prior
consent of all the parties, which consent shall not unreasonably be withheld.
8.2 The text of any news releases or other public statements which a party
desires to make with respect to the Property shall be made available to the
other parties after the close of trading on any stock exchange on which the
shares of the parties are listed prior to publication and the other parties
shall have the right to make suggestions for changes therein at any time prior
to the opening of such stock exchange on the next business day.
9. RESTRICTIONS ON ALIENATION
--------------------------
9.1 No party (the "Selling Party") shall sell, transfer, convey, assign,
mortgage or grant an option in respect of or grant a right to purchase or in any
manner transfer or alienate all or any portion of its interest or rights under
this Agreement without the prior written consent of the other party, such
consent not to be unreasonably withheld.
78
9.2 The provisions of Sections 9.1 shall not prevent GTC from entering into an
amalgamation or corporate reorganization which will have the effect in law of
the amalgamated or surviving company possessing all the property, rights and
interests and being subject to all the debts, liabilities and obligations of
each amalgamating or predecessor company, or prevent a party from assigning its
interest to an Affiliate of such party provided that the Affiliate first enters
into an agreement with the other parties on the same terms and conditions as set
out in this Agreement and agrees in writing with the other parties to
re-transfer such interest to the originally assigning party immediately before
ceasing to be an Affiliate of such party.
10. NOTICE
------
10.1 Any notice, direction, or other instrument required or permitted to be
given under this Agreement shall be in writing and shall be given by the
delivery of same or by mailing same by prepaid registered or certified mail or
by sending same by telegram, telex, telecommunication or other similar form of
communication, in each case addressed to the intended recipient at the address
of the respective party set out on the first page hereof.
10.2 Any notice, direction, or other instrument aforesaid will, if delivered, be
deemed to have been given and received on the day it was delivered, and if
mailed, be deemed to have been given and received on the fifth business day
following the day of mailing, except in the event of disruption of the postal
service in which event notice will be deemed to be received only when actually
received and, if sent by telegram, telecommunication or other similar form of
communication, be deemed to have been given and received on the day it was
actually received.
10.3 Any party may at any time give notice in writing to the others of any
change of address, and from and after the giving of such notice, the address
therein specified will be deemed to be the address of such party for the
purposes of giving notice hereunder.
11. FURTHER ASSURANCES
------------------
11.1 Each of the parties covenants and agrees, from time to time and at all
times, to do all such further acts and execute and deliver all such further
deeds, documents and assurances as may be reasonably required in order to fully
perform and carry out the terms and intent of this Agreement including, without
limiting the generality of the foregoing, any memoranda of agreement to be
registered against title to the Property.
12. RULE AGAINST PERPETUITIES
-------------------------
12.1 If any right, power or interest of any party in property under this
Agreement would violate the rule against perpetuities, then such right, power or
interest shall terminate at the expiration of twenty (20) years after the death
of the last survivor of all the lineal descendants of Her Majesty, Queen
Elizabeth II of England, living on the date of the execution of this Agreement.
13. TIME OF THE ESSENCE
-------------------
13.1 Time shall be of the essence in the performance of this
Agreement.
14. ENUREMENT
---------
79
14.1 This Agreement shall enure to the benefit of and be binding upon the
parties and their respective successors and permitted assigns.
15. FORCE MAJEURE
-------------
15.1 No party will be liable for its failure to perform any of its obligations
under this Agreement due to a cause beyond its reasonable control (except those
caused by its own lack of funds) including, but not limited to, acts of God,
fire, storm, flood, explosion, strikes, lockouts or other industrial
disturbances, acts of public enemy, war, riots, laws, rules and regulations or
orders of any duly constituted governmental authority, or non-availability of
materials or transportation (each an "Intervening Event").
15.2 All time limits imposed by this Agreement will be extended by a period
equivalent to the period of delay resulting from an Intervening Event.
15.3 A party relying on the provisions of Section 15.1 hereof, insofar as
possible, shall promptly give written notice to the other party of the
particulars of the Intervening Event, shall give written notice to all other
parties as soon as the Intervening Event ceases to exist, shall take all
reasonable steps to eliminate any Intervening Event and will perform its
obligations under this Agreement as far as practicable, but nothing herein will
require such party to settle or adjust any labour dispute or to question or to
test the validity of any law, rule, regulation or order of any duly constituted
governmental authority or to complete its obligations under this Agreement if an
Intervening Event renders completion impossible.
16. DEFAULT
-------
16.1 If a party (the "Defaulting Party") is in default of any requirement herein
set forth, the party affected by such default (the "Non-Defaulting Party") shall
give written notice to all other parties within thirty (30) days of becoming
aware of such default, specifying the default, and the Defaulting Party shall
not lose any rights under this Agreement, nor shall the Agreement or the Option
terminate, nor shall the Non-Defaulting Party have any rights, remedies or cause
of action pursuant to this Agreement, or otherwise hereunder as a result of such
default, unless within thirty (30) days after giving of notice of default by the
Non-Defaulting Party, the Defaulting Party has failed to cure the default by the
appropriate performance, and if the Defaulting Party fails within such period to
cure such default, the Non-Defaulting Party shall only then be entitled to seek
any remedy it may have on account of such default.
17. SEVERABILITY
------------
17.1 If any one or more of the provisions contained herein should be invalid,
illegal or unenforceable in any respect in any jurisdiction, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby in any other
80
jurisdiction and the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby.
18. AMENDMENT
---------
18.1 This Agreement may not be changed orally but only by an agreement in
writing, signed by the party against which enforcement, waiver, change,
modification or discharge is sought.
19. ENTIRE AGREEMENT
----------------
19.1 This Agreement constitutes and contains the entire agreement and
understanding between the parties and supersedes all prior agreements,
memoranda, correspondence, communications, negotiations and representations,
whether oral or written, express or implied, statutory or otherwise between the
parties or any of them with respect to the subject matter hereof.
20. OPTION ONLY
-----------
20.1 This Agreement provides for an option only, and except as specifically
provided otherwise, nothing herein contained shall be construed as obligating
GTC to do any acts or make any payments and the doing of any acts or making of
any payments as shall be done or made hereunder shall not be construed as
obligating GTC to do any further act or make any further payment.
21. GOVERNING LAW
-------------
21.1 This Agreement shall be governed by and interpreted in accordance with the
laws of the Province of British Columbia and the parties irrevocably attorn to
the jurisdiction of the Province of British Columbia.
IN WITNESS WHEREOF the parties have executed this Agreement as
of the day, month and year first above written.
SIGNED, SEALED and DELIVERED )
by ROBIN DAY in the presence of: )
)
- ------------------------------------)
Signature ) ___________________________
) ROBIN DAY
- ------------------------------------)
Address )
)
)
Occupation
81
THE COMMON SEAL of VALLEY )
GOLD LTD. was hereto affixed )
in the presence of: )
) c/s
- ---------------------------------------------------- )
Authorized Signatory )
)
- ---------------------------------------------------- )
Authorized Signatory )
THE COMMON SEAL of GLOBAL )
TECH CORP. was hereto affixed )
in the presence of: )
) c/s
- ---------------------------------------------------- )
Authorized Signatory )
)
- ---------------------------------------------------- )
Authorized Signatory )
82
This is Schedule "A" to that certain Option Agreement between Robin Day,
Valley Gold Ltd. and Global Tech Corp. dated the 10th day of May, 2001.
Description of Property
-----------------------
Claim Name Record Number Record Date Expiry Date
- ---------- ------------- ----------- -----------
French 374997 March 31, 2000 March 31, 2006
being one (1) mineral claim located in the Omineca Mining Division, Province of
British Columbia.
83
This is Schedule "B" to that certain Option Agreement between Robin Day,
Valley Gold Ltd. and Global Tech Corp. dated the 10th day of May, 2001.
NET SMELTER RETURNS
-------------------
1. In the event that GTC sells ores, concentrates, precipitates, cathodes, leach
solutions, or any other primary, intermediate or final product or any other
mineral substances or any other metals produced from the Property, Net Smelter
Returns for the calendar quarter shall mean the amount of Revenues actually
received by GTC from the sale of such mineral substances, less, to the extent
paid or incurred by GTC:
(a) the cost of transportation between the mill of GTC and the
buyer;
(b) the cost of assaying, sampling, smelting, and refining such
products; and
(c) taxes (other than income tax) imposed upon or in connection
with transporting and selling such products, including any
penalties assessed by the purchaser of such products; and
(d) costs of sale, if any, actually paid or incurred by GTC prior
to the date payment is due to the Optionor hereunder, provided
however, that in the event that GTC uses its own smelter or
refinery, the allowable deduction for smelting and refining
shall not exceed the cost of a comparable third party smelter
or refiner.
2. "Revenues" means proceeds received from the sale or deemed sale by GTC
of the following categories of mineral products:
(a) if GTC causes refined gold (meeting the specifications of the
London Bullion Market Association) to be produced from ores
mined from the Property, the refined gold shall be deemed to
have been sold at the Monthly Average Gold Price for the
month in which it was produced, and Revenue shall be
determined by multiplying Gold Production during the calendar
month by the Monthly Average Gold Price; as used herein,
"Gold Production" shall mean the quantity of refined gold
outturned to GTC's pool account by an independent third party
refinery for gold produced from the Property during the
calendar month on either a provisional or final settlement
basis, and the "Monthly Average Gold Price" shall mean
the average London Bullion Market Association P.M.
Gold Fix, calculated by dividing the sum of all such
prices reported for the month by the number of days for
which such prices were reported;
(b) if GTC causes refined silver (meeting the specifications for
refined silver subject to the New York Silver Price published
by Handy & Harman) to be produced from ore mined from the
Property, the refined silver shall be deemed to have been sold
at the Monthly Average Silver Price for the month in which it
was produced,
84
and Revenue shall be determined by multiplying Silver
Production during the calendar month by the Monthly Average
Silver Price; as used herein, Silver Production shall mean the
quantity of refined silver outturned to GTC's pool account by
an independent third-party refinery for silver produced from
the Property during the calendar month on either a provisional
or final settlement basis, and the "Monthly Average Silver
Price" shall mean the average New York Silver Price as
published daily by Handy & Harman, calculated by dividing the
sum of all such prices reported for the calendar month by the
number of days for which such prices were reported;
(c) if GTC causes refined metals other than refined gold and
refined silver to be produced from ores mined from the
Property, such refined or processed metals shall be deemed
to have been sold at the Monthly Average Price for the
month in which they were produced, and Revenue shall be
determined by multiplying Metal Production by the Monthly
Average Price; as used herein, "Metal Production" shall
mean the quantity of such refined metal outturned to GTC's
pool account by an independent third party refinery for
such metal from the Property during the calendar month on
either a provisional or final settlement basis, and the
"Monthly Average Price" shall mean the average spot price
for such metal as published weekly by Metals Week,
calculated by dividing the sum of all such prices reported
for the calendar month divided by the number of weeks for
which such prices were reported;
(d) in the event that GTC sells raw ores or concentrates, produced
from ores mined from the Property, Revenue shall be determined
by multiplying the amount of recoverable metals contained in
such raw ore or concentrates sold by the Monthly Average Price
(as that term is defined in paragraphs (a), (b) or (c) above,
as applicable) for such metal or metals during the month of
sale;
(e) where outturn of refined metals is made by an independent
third party refinery on a provisional basis, Revenue shall be
based upon the amount of such provisional settlement, but
shall be adjusted in subsequent statements to account for the
amount of refined metal established by final settlement by
such refinery;
The Optionor acknowledges that the purpose of paragraphs (a), (b), (c) and (d)
under this definition of Revenue is to pay a percentage of the Net Smelter
Returns on the basis of value of the mineral products produced from ores mined
from the Property as established by the London Bullion Market Association P.M.
Gold Fix for gold, the New York Silver Price as published by Handy & Harman for
silver, and the spot price for all other metals as published by Metals Week for
such metals, as the case may be, regardless of the price or proceeds actually
received by GTC for or in connection with such metal or the manner in which a
sale of refined metal to a third party is made by GTC. The Optionor further
acknowledges that GTC shall have the right to market and sell or refrain from
selling refined gold, silver and other metals produced from the Property in any
manner it may elect, and that GTC shall have the right to engage in forward
sales, future trading or commodity options trading, and other price hedging,
price protection, and speculative arrangements ("Trading Activities") which may
involve the possible delivery of gold, silver or other metals produced from the
Property. The Optionor specifically acknowledges and agrees that it shall not be
entitled to participate in the profits or be obligated to share in any losses
generated by GTC's actual marketing or sales practices or by its Trading
Activities.
85
3. GTC shall pay to the Optionor a royalty equal to two percent (2%) of Net
Smelter Returns determined in accordance with this Schedule "B" within thirty
(30) days after the receipt by GTC of Revenues.
4. GTC shall provide copies of all data relating to the royalty calculation made
hereunder (including, but not limited to, settlement sheets used in calculating
the Net Smelter Returns royalty) to the Optionor at the same time that the Net
Smelter Returns royalty payments are paid.
5. GTC shall permit the Optionor to inspect, at the Optionor's expense, the
books and records of GTC which are pertinent to the determination of the royalty
payable hereunder, at any reasonable time during normal business hours, provided
that such inspection is conducted by the Optionor or by an accounting firm of
recognized standing, at least one of whose members is a member of the Canadian
Institute of Chartered Accountants, and provided that such inspecting does not
interfere unreasonably with the operations or procedures of GTC.
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Exhibit 23.2
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[Letterhead of Richard M. Prinzi, Jr., CPA]
CONSENT OF INDEPENDENT AUDITOR
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement to Form SB-2 of our report dated July 29, 2001 relating
to the financial statements of Global-Tech Capital Corp. (a Nevada corporation
in the development stage) as of June 30, 2001 and June 30, 2000, and the related
statements of operations, changes in shareholders' equity and cash flows for the
periods from July 1, 2000 through June 30, 2001 and July 1, 1999 to June 30,
2000, which appears in such Prospectus. We also consent to the reference to us
under the heading "Experts" in such Prospectus.
Staten Island, New York
September 7, 2001
87